Review article

EUROPEAN DEBT CRISIS: THEORETICAL AND EMPIRICAL INVESTIGATION OF EXTERNAL IMBALANCES AS ONE OF ITS MAIN CAUSES

Anna Ruščáková ; Technical University of Kosice, Faculty of Economics
Jozefína Semančíková ; Technical University of Kosice, Faculty of Economics

Abstract

Th e European sovereign debt crisis that emerged at the end of 2009 and de facto followed
the subprime mortgage crisis in the United States, has highlighted the diffi culty resulting
from signifi cant and deepening external imbalances within the Eurozone since the introduction
of the euro. Th e causes of growing imbalances were predominantly the deepening current
account defi cits in many peripheral countries and the growing current account surpluses in a
vast number of core countries. Th erefore, the main aim of the paper is to analyse the impact of
the global economic crisis and European sovereign debt crisis on the development of external
imbalances within the Eurozone. Th e methodology is based on the indicator of current account
balance, monitoring of development in balance of payments in the selected Eurozone countries
and the comparison of the mentioned development before the crisis and aft er its outbreak. Th e
fi ndings presented in the paper indicate an improvement of the situation in the area of interest
in many Eurozone countries. Facts arising from the analysis also highlight the fact that identifi
ed changes of the current account balance aft er the outbreak of the crisis were signifi cant in a
large number of analysed countries. Th is indicates a signifi cant infl uence of global imbalances
on the progress and spreading of the current debt crisis in the Eurozone and a need to re -evaluate
the current policy mix conducted in the Eurozone and to mitigate the impact of the serious
design failures of the Euro on the analysed issue.

Keywords

European debt crisis; defi cit countries; surplus countries; current account; balance of payments

Hrčak ID:

170755

URI

https://hrcak.srce.hr/170755

Publication date:

15.12.2016.

Article data in other languages: croatian

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