The structural problems brought to light by the financial crisis have largely remained in place or shifted from the private (banking) sector to the public sector. In the United States, despite increased saving, household debt remains high; their wealth position has deteriorated substantially due...

As most European countries were coming out of recession at the end of 2009, Greece was entering a tumultuous period. The announcement of the newly elected Greek government in October 2009 that the projected budget deficit for 2009 would be 12.7 percent of GDP2 (rather than the 5.1 percent...

Spain has suffered a lot from the current crisis and is the first large economy that may find itself in need of fiscal rescue. If this happens it may prove quite damaging to the euro. Yet, since the mid-1990s, Spain was a champion of growth and fiscal stability; its unemployment had fallen...

Since the beginning of the financial crisis numerous proposals have been made for the reform of public policies towards banks and other financial companies. Many individual governments have already taken action, and several official international bodies have also been active in considering...

The European debt crisis followed the US financial crisis with a delay of one and a half years. While its first signs were visible in November and December of 2009 when the rating agency Fitch downgraded Ireland and Greece, it culminated on 28 April 2010 when the intra-day interest rate for...

This chapter discusses the current economic situation and the future outlook for Europe stressing the cause and implications of a strong euro as well as the need for a common fiscal framework through an improvement of the Stability and Growth Pact.