Crisis Politics in Europe

• DOI: 10.1177/0010414015617967
• Publication Date: 2015-12-31T07:12:20Z
• Authors: Stefanie Walter
• Keywords: Austerity; European debt crisis; Balance of Payments; Vulnerability

When countries face balance-of-payments crises, their policy responses vary widely. This article argues that the choice between two main options of internal adjustment (i.e., austerity and structural reforms) external exchange-rate devaluation) depends on how costly each these strategies is for a country overall. Although strategy thus structurally determined, level political conflict associated with crisis management both national vulnerability profile partisan interests. Moreover, irrespective strategy, all governments design specific reforms in ways shelter own voters. Empirically, this uses qualitative case studies survey data to examine significant variation responses, politics, distributive outcomes 2008-2010 global financial eight Eastern European countries. The concludes discussion implications experience politics Eurozone crisis.