The Eurozone crisis also known as the European debt crisis, was a multi-year debt crisis that happened in the European Union.
The crisis happened due to a currency crisis, which is a stop of the flow from foreign capital into countries that were dependent on foreign lending. The crisis became worse by the incapability of the countries to devalue (reduction of the currencies value) due to the Euro being a shared currency.
EU treaty violations change
The EU's Maastricht Treaty contains information that forbids that partner countries bail out another partner country, mainly to stop the spreading of public debt. The clause is designed to encourage good fiscal policies.
- Copelovitch, Mark; Frieden, Jeffry; Walter, Stefanie (2016). "The Political Economy of the Euro Crisis". Comparative Political Studies. doi:10.1177/0010414016633227. ISSN 0010-4140.
- Frieden, Jeffry; Walter, Stefanie (2017). "Understanding the Political Economy of the Eurozone Crisis". Annual Review of Political Science. doi:10.1146/annurev-polisci-051215-023101. ISSN 1094-2939.