Europe in Crisis: A Structural Analysis

German Wage Moderation and the Eurozone Crisis: A Critical Analysis
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A decade later, they have moved into the right quadrants, albeit while maintaining relatively low levels of individual cohesion. Factors that drove cohesion in the east — such as large inflows of EU funding, progressive integration into the single market, and membership of mechanisms of deep integration such as Schengen area and the eurozone — underwent little change in the west. The potential for them to strengthen cohesion in the west had been realised in earlier periods.

The largest declines in structural cohesion between and occurred in — in descending order — the Netherlands, Italy, Spain, the UK, Ireland, and Portugal. As there was also a decline in structural cohesion in France during the period, this means that four of the six largest EU member states experienced a trend directly opposed to that in eastern EU states.

The other large-scale trend is a north-south divide in individual cohesion. The divide is particularly significant due to the fact that France, Italy, and Spain also experienced a decline in structural cohesion. This is remarkable given that the country has traditionally been one of the most committed pro-integration actors in European policymaking.

However, the north-south divide is imperfect. The trend does not apply everywhere in the south, where the financial crisis arguably hit the hardest in heavily indebted countries that suffered from weak governance. Like Ireland, Portugal incurred serious economic damage during the crisis but its level of individual cohesion has risen in the past decade.

For both countries, this rise related to successful management of the crisis. Individual cohesion rose by 0. Poland and Hungary also defied the broader trend. Both experienced a 0. In Hungary, the decline in individual cohesion came to a stop after ; in Poland, the decline has only been apparent since Events of the past decade have broken the cluster the founding six EU member states formed in the cohesion matrix in At the time, only Luxembourg had far higher levels of structural and individual cohesion than the other founding members.

Since then, Italy and France have drifted close to the lower left quadrant of the matrix, while Belgium and Luxembourg have experienced a less dramatic decline in both types of cohesion. The Netherlands experienced a substantial loss of structural cohesion but, like Germany, an increase in individual cohesion. In the EU Cohesion Monitor matrix, Austria fell from 5th place to 13th place in structural cohesion and rose from 12th place to 10th place in individual cohesion between and Between and , Belgium fell from 2nd place to 3rd place in individual cohesion and from 2nd place to 7th place in structural cohesion in the EU Cohesion Monitor matrix.

Introduction: Europe in Crisis: A Structural Analysis

In indicators of structural cohesion, however, the country experienced a decline in Resilience, Security, and Economic Ties. Displaying weak structural and individual cohesion in , Bulgaria had by experienced a major increase in its indicators of structural cohesion rising from 16th place to 8th place in the EU Cohesion Monitor matrix , mostly because of a massive inflow of funding from EU sources.

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Bulgaria retained a relatively low level of individual cohesion, moving from 21st place to 20th place in the matrix. Bulgaria appears to have the greatest potential to improve its structural cohesion in Security, Economic Ties, and Policy Integration. Experiencing significant growth in the Funding and Security indicators, but declines in the Resilience and Economic Ties indicators, Croatia stands out from other relatively new member states by remaining well below the EU average in structural cohesion.

Croatia moved from 22nd place to 23rd place in structural cohesion between and ; in comparison, Romania, jumped from 21st place to 11th place during this period. However, Croatia moved from 20th place to 18th place in individual cohesion between and , while Romania moved from 25th place to 21st place during this period. The country has the lowest level of structural cohesion of any member of the EU, but had the 4th and 7th highest levels of individual cohesion in and respectively.

In individual cohesion, Cypriots have substantial experience with the rest of Europe and show high levels of Experience and Engagement. In contrast, they have relatively negative attitudes towards European integration in general. The Czech Republic has the largest split between high levels of structural cohesion and low levels of individual cohesion of any EU state aside from Hungary. The Czech Republic experienced a significant increase in structural cohesion in both absolute and relative terms, moving from 8th place in around the same level as France and Germany to 5th place in by which time Germany and France had dropped to 13th place and 18th place respectively.

Between and , the largest change in these indicators occurred in the level of financial flows from the EU to Prague. In the EU Cohesion Monitor matrix, the country remained in 24th place in structural cohesion between and , dropping from 12th place to 15th place in individual cohesion during this period. In , Estonia matched or exceeded the EU average in every indicator of cohesion except for Security and Experience. During the preceding decade, the country moved from the upper left quadrant to the upper right quadrant in the EU Cohesion Monitor matrix, with its individual cohesion remaining stronger than its structural cohesion.

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That Spain cannot grow and create employment with these austerity policies is absolutely clear. Some researchers Castles, ; Castles and Miller, foresaw that such a decrease could be linked to the adoption of stricter rules for asylum. The short-term effects are: i reduced migration flows to developed countries in response to fewer job opportunities, ii an increase in the propensity for some migrant workers to return to their homelands in reaction to unemployment or lower earnings, iii attempts by governments to provide incentives for unemployed migrant workers to leave, iv large declines in irregular migration, v reduced remittances sent by migrant workers, and vi increased hostility towards migrants on the part of host populations. Sward Jon Migration and the financial crisis: how will the economic downturn affect migrants? During the European debt crisis , several countries in the Eurozone were faced with high structural deficits , a slowing economy and expensive bailouts that led to rising interest rates , which exacerbated these governments' tenuous positions. Deep structural problems persist, including stubbornly high unemployment, weak banking systems, and huge debt. The result of these very different dynamics in the European Union has been a trade imbalance and a growing divergence in competitiveness between the centre and the periphery.

With regards to changes in cohesion compared to other member states, Estonia rose from 14th place to 8th place in structural cohesion between and , and from 10th place to 8th place in individual cohesion during this period. At first sight, Finland appears to have a fairly stable cohesion profile: in , its individual cohesion was higher, and its structural cohesion lower, than the EU average.

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Below the surface, the changes are more profound. Although Finland experienced a sharp decrease in the Resilience indicator, increases in the Funding and Security indicators offset the effect of this on overall structural cohesion. Although it is key to the European integration process, France is below the EU average in most indicators of cohesion, with the noteworthy exceptions of Policy Integration, Security, and Resilience.

France moved from the upper left quadrant to the lower left quadrant reflecting weak structural and individual cohesion in the EU Cohesion Monitor matrix. Between and , France dropped from 8th place to 18th place in structural cohesion, and from 15th place to 22nd place in individual cohesion. In the EU Cohesion Monitor matrix, Germany was in the 5th place for individual cohesion in , up from 6th place in , in 13th place for structural cohesion in , down from 8th place in In the EU Cohesion Monitor ranking, Greece remained in 16th place in structural cohesion between and , and it dropped from 14th place to 26th place in individual cohesion in this period.

Hungary has the largest split between high structural cohesion and low individual cohesion of any EU state — including the Czech Republic, which has a similar divide. In the EU Cohesion Monitor matrix, Hungary jumped from 13th place to 3rd place in structural cohesion between and , and fell from 27th place to 28th place in individual cohesion during this period. Ireland has the largest gap between high individual cohesion and low structural cohesion of any EU state. Only the Benelux countries have followed a similar trajectory although these states have much higher levels of structural cohesion.

It seems that strong individual cohesion helped Ireland adjust to the burden of its sovereign debt crisis. In the EU Cohesion Monitor ranking, Ireland moved from 3rd place to 2nd place in individual cohesion between and , and from 24th place to 26th place in structural cohesion in the period.

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Among the large and traditionally integrationist EU member states, Italy stands out even more than France for its declining levels of cohesion. Italy fell from 19th place to 25th place in structural cohesion between and The change in individual cohesion was even more profound: the country dropped from 10th place to 23rd place during this period, widening its gap with Germany in individual cohesion from four places to 18 places. The country had higher structural cohesion than individual cohesion, but the latter was still near the EU average. In the EU Cohesion Monitor ranking, Latvia moved from 5th place to 3rd place in structural cohesion, and from 21st place to 17th place in individual cohesion.

The country exceeds the EU average in every indicator except for these two. Structural cohesion declined slightly between and , but individual cohesion continued to grow during this period. In the EU Cohesion Monitor ranking, Lithuania rose from 7th place to 5th place in structural cohesion, and from 18th place to 8th place in individual cohesion, between and Luxembourg is a thoroughly Europeanised country. It has the highest levels of structural cohesion and individual cohesion in the EU, placing it on the opposite side of the EU Cohesion Monitor matrix from the United Kingdom.

However, Luxembourg still has some potential to increase its levels of cohesion, if only in security cooperation with, and economic ties to, other EU states. One of the two countries with the lowest structural cohesion in the EU in , Malta climbed to 20th place in structural cohesion during this period while Cyprus, the other one of these countries, remained in 28th place. Although Malta retained the 4th highest level of individual cohesion in the EU between and , its individual cohesion score rose from 6.

Among the highly Europeanised Benelux countries, the Netherlands was the only state to move from the top right quadrant of the EU Cohesion Monitor matrix indicating high individual and structural cohesion to its top left quadrant indicating high individual cohesion and low structural cohesion between and Despite the negative impact of growing support for anti-EU political parties on the Engagement indicator, rises in all other relevant indicators caused a net 0.

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In contrast, structural cohesion decreased by 0. The Netherlands dropped from 3rd place to 15th place in structural cohesion, and rose from 7th place to 6th place in individual cohesion, between and In , Poland was typical of a country that had benefited from European integration, having experienced a significant increase in structural cohesion and stable individual cohesion since Poland slipped from 24th place to 25th place in individual cohesion while rising from 20th place to 12th place in structural cohesion during this period. As a result, the country moved from the bottom left quadrant to the top left quadrant in the EU Cohesion Monitor matrix.

Portugal could improve its structural cohesion by attracting increased EU funding, which would require further fiscal consolidation, or increasing its Resilience, which declined by 2. In the ranking, Portugal fell from 14th place to 21st place in structural cohesion, but rose from 23rd place to 18th place in individual cohesion during this period.

Like Malta, Portugal stands out for going against the wider trend of declining individual cohesion among southern EU states. This is despite the massive inflow of EU funding — a rise of 6. Romania experienced only modest growth in its indicators of individual cohesion, the largest of which was a 1. Beginning from a much lower position than Bulgaria in , Romania was by just one place beneath the country in both structural and individual cohesion.

In , Slovakia occupied a unique place in the upper right quadrant of the EU Cohesion Monitor matrix indicating strong structural and individual cohesion. No other country gained so much in structural cohesion while performing moderately well in individual cohesion. But only one of its indicators of individual cohesion, Approval, was higher than average. In structural cohesion, the country rose from 4th place in the ranking to 2nd place in In individual cohesion, the country fell from 15th place to 16th place during the period.

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Like Slovakia, Slovenia has strong economic links with the rest of the Europe and a large proportion of its population living near another EU state. During the entire period, the country remained in 8th place in structural cohesion, and moved from 9th place to 12th place in individual cohesion.

In individual cohesion, Spanish support for eurosceptic parties increased considerably, even though the country had no openly anti-EU party.

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In the EU Cohesion Monitor ranking, Spain fell from 8th place in structural cohesion in the same level as Germany and France to 19th place in one place below France. In individual cohesion, Spain did not experience as steep a decline as Greece, Italy, or France, but nonetheless dropped from 7th place to 14th place during the decade. Sweden maintained remarkably stable levels of cohesion between and , despite the effects of the financial crisis and its deep involvement in the refugee crisis the country was one of the top three destinations for refugees.

Its swift recovery from the financial crisis may have stemmed from its experience with a separate financial crisis in the s. All of its indicators of individual cohesion increased between and , although this trend lost some of its momentum following the onset of the refugee crisis. In the EU Cohesion Monitor ranking, Sweden rose from 22nd place in to 21st place in in structural cohesion, and from 18th place to 10th place in individual cohesion. In , the United Kingdom had the lowest levels of individual and structural cohesion of any large EU member state. Between and , the UK moved from 26th place to 24th place in individual cohesion, and from 24th place to 26th place in structural cohesion.

Meanwhile, Italy took up the place near the UK in the matrix that Romania and Poland occupied in Attitudes rose by 1. Much of the change occurred between and , a period in which Engagement fell by 2. In the same period, however, the Attitudes indicator increased by 1 point.