Varieties of Capitalism and the Euro Crisis

Abstract

This article examines the role played by varieties of capitalism in the euro crisis, considering the origins of the crisis, its progression, and the response to it. Deficiencies in the institutional arrangements governing the single currency are linked to economic doctrines of the 1990s. The roots of the crisis are linked to institutional asymmetries between political economies. Northern European economies equipped to operate export-led growth models suitable for success within a monetary union are joined to southern economies whose demand-led growth models were difficult to operate successfully without the capacity to devalue. The response to a tripartite crisis of confidence, debt, and growth is explained in terms of the interaction of institutions, interests, and ideas, and its importance for the future of European integration is explored.

Acknowledgements

I am grateful to Iain Begg, Pepper Culpepper, Philipp Genschel, and Randall Hansen for comments on an earlier draft.