European imbalances and the debt crisis in Europe

Alexandra Razumnova

Master's thesis

Abstract:

The imbalances within the Euro-zone were the main reasons of the crisis that had led to the growing budget deficits in the Southern Europe resulting in the accumulation of unsustainable debt. The imbalances were caused by the declining competitiveness of the South vis-s-vis the North. The main causes of the declining competitiveness are the differences in unit labor costs invoked by different regulations concerning markets in the Euro-zone countries and the diverging levels of productivity, which is liked with the different levels of technological advancement. The contributing factor is the institutional imperfections of the EMU, that did not allow the countries in Southern Europe to restore their competitiveness by traditional means without providing them with alternativesthe labor .

Abstract:

The imbalances within the Euro-zone were the main reasons of the crisis that had led to the growing budget deficits in the Southern Europe resulting in the accumulation of unsustainable debt. The imbalances were caused by the declining competitiveness of the South vis-s-vis the North. The main causes of the declining competitiveness are the differences in unit labor costs invoked by different regulations concerning the labor markets in the Euro-zone countries and the diverging levels of productivity, which is liked with the different levels of technological advancement. The contributing factor is the institutional imperfections of the EMU, that did not allow the countries in Southern Europe to restore their competitiveness by traditional means without providing them with alternatives.

Keywords

unit labor costs, unemloyment, competitiveness, imbalances, monetary union, government bonds, sovereign debt

Keywords

imbalances, monetary union, government bonds, unemployment, unit labor costs, competitiveness, sovereign debt

Language used: English

Date on which the thesis was submitted / produced: 25. 6. 2013

Thesis defence

• Date of defence: 4. 6. 2014
• Supervisor: Pavel Hnát
• Reader: Josef Bič

Vysoká škola ekonomická v Praze

Master programme / field:
Mezinárodní ekonomické vztahy / International and Diplomatic Studies