The European Crisis: Analysis of the Macroeconomic Imbalances in the Rescued Euro Area Countries
Macroeconomic imbalances are considered as one of the most important causes of European crisis. The crisis has significantly aggravated these imbalances, and some euro area countries - Greece, Ireland, Portugal, Spain and Cyprus - have had to request economic and/or financial assistance. Using the scoreboard of headline indicators of the Macroeconomic Imbalance Procedure as reference and applying statistical analysis methods, this paper provides new evidence on the role played by the assistance programmes in these five rescued countries and analyses their patterns of divergence/convergence relative to the euro area aggregate since 2007. The evidence indicates that the values of the net international investment position, private and public debt and the unemployment rates have diverged considerably from the thresholds and the euro area averages. A decade after the start of European crisis, although the economic situation has improved, the effects of the crisis and of the austerity policies continue to be felt and the macroeconomic imbalances persist in the rescued countries. (original abstract)
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