you're reading...
Economic and Social Policies, PUBLICATIONS

A decade on from the start of the crisis: Main responses and remaining challenges

Written by Marcin Szczepanski,

© doidam10 / Fotolia

It has been a decade since the financial crisis erupted and changed the world in 2008. Few at the time guessed what would be its magnitude and long-term consequences. The interconnectedness of the economy and the financial sector facilitated the spread of the crisis from the United States to Europe. First, the EU faced the Great Recession in the 2008-2009 period and then, after a short recovery, several Member States succumbed to the sovereign debt crisis. The combined crises had catastrophic consequences for economic growth, investment, employment and the fiscal position of many Member States. The EU engaged in short-term ‘fire-fighting’ measures such as bailouts to save banks and help stressed sovereigns, while at the same time reforming the inadequate framework. While signs of moderate recovery showed in 2014, the risk of falling into deflation or secular stagnation remained high, and it was only in 2017 that the EU economy returned to a state similar to that of before the crisis. The signs in 2019 are not so promising however.

Many efforts have been made to improve resilience in the EU and the euro area. These have included improving the stability of the financial sector, strengthening economic governance, creating a safety net for sovereigns in distress and carrying out structural reforms, particularly in the countries most affected. In addition, the European Central Bank (ECB) has taken unconventional policy measures. Nonetheless many argue that the pace of the reforms has slowed down considerably since 2013 when the economic situation began to improve.

The legacy of the crisis is still present and many challenges persist. These include the absence of a clear and agreed vision for the future of economic and monetary union (EMU), perennial macroeconomic imbalances and high public deficits in a number of Member States, and the ongoing risk of a doom loop between sovereigns and the banking sector. Post crisis vulnerabilities also include rising inequalities, youth unemployment and high in-work poverty risk levels.

See also our infographic, A decade on from the financial crisis: Key data.


Read the complete briefing on ‘A decade on from the start of the crisis: Main responses and remaining challenges‘ in the Think Tank pages of the European Parliament.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download the EPRS App

EPRS App on Google Play
EPRS App on App Store
What Europe Does For You
EU Legislation in Progress
Topical Digests
EPRS Podcasts

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 3,088 other followers

RSS Link to Members’ Research Service

Disclaimer and Copyright statement

The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.

For a comprehensive description of our cookie and data protection policies, please visit Terms and Conditions page.

Copyright © European Union, 2014-2019. All rights reserved.

%d bloggers like this: