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This paper aims to examine the contagion effects of Greece, Ireland, Portugal, Spain and Italy (GIPSI) and US stock markets on seven Eurozone and six non-Eurozone stock markets.

In this paper, a dynamic conditional correlation (DCC) model popularly known as DCC-GARCH (Generalized Autoregressive Conditional Heteroscedasticity) model given by Engle (2002) is applied to estimate the DCCs across sample markets.

Analyzing the Eurozone crisis period, the empirical results suggest that among GIPSI stock markets, Spain, Italy, Portugal and Ireland appear to be most contagious for Eurozone and non-Eurozone markets. The study finds that France, Belgium, Austria and Germany in Eurozone and UK, Sweden and Denmark in non-Eurozone are strongly hit by the contagion shock.

The findings of the study have significant implications for the concerned regulatory authorities, as it may provide an important direction for further policy research with regard to financial integration in the European Union (EU). From global investors’ perspective, the EU-based diversification strategies seem to be inefficient especially during Eurozone crisis.

To the best of the authors’ knowledge, this is the first study that examines the issue of financial contagion of Eurozone crisis for a large basket of stock markets of European countries comprising seven Eurozone and six non-Eurozone markets for the period 2009-2012. The study uses the Markov regime switching model to identify crisis period and utilizes the DCC estimates of DCC-GARCH to examine the patterns of financial contagion. The finding of this study is quite interesting and is different in several ways than existing studies in the literature.

The significant economic weight of the Eurozone in the globe caused the contagion of the Eurozone debt crisis on the emerging markets. The Eurozone debt crisis caused the sudden plummeting of the cross-border bank credit (BC) to India causing a significant impact on bank lending in India. Essentially, the purpose of this study is to find an answer to the question: Did the decline in cross-border cross-credit from Eurozone had an impact on domestic BC in India?

Using the data for the period from 2000 to 2013 sourced from Bank for International Settlements international banking statistics consolidated data sets, the novel specification of the study captures the impact of Eurozone cross-border credit on India by developing two regression frameworks that capture the pre-Euro debt crisis period scenario and post-Euro debt crisis period scenario.

The results offer a very interesting analogy of the behavior of BC and cross-border credit during the pre and post-Eurozone crisis scenarios of analysis. During the pre-Eurozone crisis period, cross-border credit displayed a significant negative relationship with BC indicating that cross-border credit to the Indian firms indirectly benefitted the banks by creating increased demand for domestic BC. The post-Eurozone crisis period witnessed a nexus between cross-border credit and BC during the pre-Eurozone crisis period, which gradually disappeared largely because of the onset of the Eurozone crisis.

This study is a first of its kind in investigating the impact of the Eurozone crisis on an emerging economy like India. This study supports the hypothesis of the existence of the transmission of financial shocks through the balance sheets of international banks. The findings conform to the policy concerns of most of the emerging economies that international banks transmit financial shocks from their home countries. The implication for India and other emerging economies is that international credit growth deserves careful monitoring.

The purpose of this paper is to examine the impact of the Eurozone financial crisis by discussing the experiences of Greece, Ireland and Spain. It particularly examines the influence and actions of the Troika in the management of the sovereign debt crisis in the Eurozone.

The primary source of information for this study has been the documents of the Greek, Irish and Spanish Governments (often only available in their native language) and the reports of EU bodies and the IMF, supplemented by media coverage, as deemed appropriate. This has been analysed on a comparative basis to contrast the experiences of these three countries.

This study reveals how the Eurozone crisis has impacted on financially weak countries in this currency union. The fiscal conservatism of the Troika (the IMF, the EU and the European Central Bank) has had profound consequences for these economies, which have experienced dramatic cuts in public services.

This study has focused on the experiences of three countries in the Eurozone. There is a case for extending this analysis to other Eurozone countries.

There are two approaches to recession – governments can stimulate demand by infrastructure spending or take the financial conservatism route of reducing public expenditure and public sector borrowing. However, the severity of the crisis undermines the first approach and there are uncertain outcomes with the second approach. This paper shows the effects of adopting financial conservatism as a strategy in this crisis.

The austerity programmes pursued by the governments in this study have led to unemployment, migration of skilled workers, collapse in property markets, failing banks and social unrest.

This study takes an accounting perspective on the Eurozone crisis. This offers a distinctive interpretation of events. This study examines the merits of widely used theories in studies of public sector change namely legitimation and resource dependency theory intertwined with power and offers insights into how meaningful they are in explaining the dramatic influence of austerity programmes in the Eurozone.

The paper examines the impact of the deteriorating fiscal conditions of Eurozone countries on spillover effects on bank credit margins. It is investigated whether these effects have been reduced after European Central Bank’s (ECB) signaling of pursuing an expansionary, unconventional, monetary policy to address the debt crisis in Eurozone.

A general econometric panel model is applied to investigate spillover effects between Eurozone countries and bank credit margins. In total, three periods are examined: the period before the peak of the global financial crisis and the beginning of the Irish banking crisis, the period during the debt and bank crisis in Eurozone and the period after ECB's signaling of extremely aggressive monetary easing.

According to empirical results, before the peak of the global financial crisis there was no substantial credit risk transfer from Eurozone sovereigns to banks. During the period of debt and bank crisis in Eurozone, the deterioration of the fiscal situation of Eurozone countries had a significant impact on bank Credit Default Swap (CDS) spreads. After ECB's signaling of extremely aggressive monetary easing, it does not seem to be any significant relationship between Eurozone sovereigns and bank CDS spreads. These findings reinforce the assessment that ECB's measures were effective, achieving the key objective of normalizing economic conditions and ensuring financial stability in Eurozone.

A question is whether effects can change when the corresponding contraction will lead to a reinstatement of “normal” conditions. Would there be a reversal of risk premium trends in bond markets? Although the answer from casual observations seems to be negative, it is a valid research question to be examined. An interesting issue concerning the unconventional monetary policy measures implemented by ECB concerns the issues of moral hazard that they incorporate, something that could not be addressed. Another research perspective could be the use of the beta coefficient to measure the systematic and unsystematic risk of banking sector shares.

The results have strong implications for ECB and European banking regulation. Regulators should mainly pay more attention to the amount and concentration of sovereign debt held by banks. Eurozone financial system could be less vulnerable to the sovereign credit risk. It raised the critical question of whether a more strict regulation is needed. Regulators should not intervene if not necessary, but they must prevent the transmission of crises between markets. This will likely bring trust to the developed countries' sovereign debt and the portfolios of the financial institutions, which hold most of this debt will be considered safe as well.

The conclusions provide a safe counterweight in various respects. First, the negative effects and the need to rapidly cease or limit such policies. Second, the financial stability aimed by ECB. Such policies contain the possibility of a subsequent moral hazard related to Member State and bank behavior. However, these contingencies need to be assessed with the benefits resulting from the restoration of financial markets and the disconnection between banking and sovereign credit risk. This leads Eurozone's financial system to become less vulnerable to the sovereign credit risk and therefore more safe, helping to restore confidence in the real economy.

Contribution in terms of methodology and conclusions. It offers important conclusions regarding the limitations of yields and volatility of CDS spreads. It examines the spillover effects of the fiscal situation of Eurozone countries on banking institutions by extending the existing methodology and introducing new questions focusing on the reaction of CDS market to the ECB monetary policy, the reduction of risk premiums at sovereign and banking level and the gradual reduction of interdependence between them.

This study aims to research the effects of unemployment wages current account and consumer price index (CPI) on the real gross domestic product (RGDP), which, in the optimum currency area (OCA) theory, supposes that countries with higher factor mobility can significantly profit from the currency area. However, in this study, it is shown that the considered optimum currency crisis (OCC) model is affected by mobility factors, as the defined theory has not been perfectly realised in the Eurozone.

In this study, Breusch–Pagan–Godfrey and Lagrange multiplier (LM) tests are used for supporting the survey for better estimation of the panel cointegration tests, where Pedroni's (1995, 1997) technique is used. The unit root tests are employed, of which the Phillip–Perron and augmented Dickey–Fuller tests (unit root test, Dickey, D. and W. Fuller, 1979) are considered.

It can be concluded that demand shocks will tend to be more asymmetric instead of being symmetric, even though they are in the customs union (CU). However, Polish workers in a given scenario may move to Germany, but because of the rigidity of the labour market and qualification differences between workers, the interregional integration of member countries is reduced, and this reduces the absorption of asymmetric shocks. In Germany, where strong employment protection and rigidity are observed in comparison to Poland, although there has been historical migration and economical collaboration, unfortunately, the integration of the two countries’ economies has not been realised.

Quantitative research on fiscal union and the estimation of its effects is not possible because there is no practical experience of fiscal union throughout the European Union (EU). However, quantitative research is used for estimating the effects of OCA in the Eurozone. Quantitative investigation is particularly focused on the monetary union and single currency and its impact on growth rate. In this study, the ordinary least squares (OLS) method and panel cointegration test are employed for estimating the effects of the considered variables.

The Eurozone and the application of a single currency throughout the EU was a considerably difficult task. In addition, the adoption of a single currency was not easy for those member countries that fulfilled the “convergence criteria” (or “Maastricht criteria”) and who joined the Eurozone, because only adoption is not enough; maintenance of those criteria is also required. This study analysed the application of the Eurozone in the light of the OCA of Mundel's theory.

The OCA is important for member countries’ economic relations. However, the application of a single currency is not easy and needs to be controlled and regulated to ensure best practises throughout the Eurozone. Monetary integration is not a simple process, and Eurozone countries’ financial difficulties affect each other’s markets’ indifferent aspects. Particularly in any market recession, demand shocks tend to have different effects. Furthermore, in comparison to the monetary union, the CU has a considerable impact on trade enlargement.

In this study, the effects of the independent variables “wages, unemployment, CPI and capital flow” on the dependent variable “RGDP” is considered, which, in the OCA theory, supposes that countries with higher factor mobility can significantly profit from the currency area. In application, it was turned into crisis because of inadequate monetary and fiscal application. In this paper OCA is questioned in the light of the Eurozone for bringing better understanding to these difficulties. The considered model and estimations are used for evaluating to create sustainable monetary integration for economic growth.

The purpose of this paper is to assess the impact of the Great Recession (2008-2014) on the labor market profiles and integration process in the European Union (EU26) and in the 12 historical Eurozone countries.

This study assesses the impact of the crisis, and applies multivariate statistical methods containing a principal component analysis and an agglomerative hierarchical clustering. Two non-overlapping sub-periods are established: a pre-crisis (1999-2007) period and a crisis (2008-2014) period, and eight European indicators are considered.

The results are threefold. First, they bring strong evidence of a significant impact of the crisis on the process of integration. Second, they interestingly reveal more heterogeneity in the aftermath of the crisis across the EU countries, while more homogeneity across the Eurozone countries. Third, this apparent homogenization is accompanied by a polarization process into two main groups of countries including Spain, Portugal, Finland and the Netherlands in one group while the rest of the Eurozone in the other.

This study is unique as it does not only present a snapshot of the challenges posed by the Great Recession to the European Union and Eurozone labor market profiles, but it also assesses its impact on their integration process. In addition, using the, suitable yet ignored, multivariate statistical methods on the latest data to study such an impact is another contribution of this paper.

Acknowledging the important role of the media in shaping a European public sphere, the purpose of this paper is to explore how the recent economic crisis is discursively construed in the context of the British media discourse. It investigates discursive constructions of the economic crisis in two political magazines of different ideological positioning by placing emphasis on the economic crisis in Greece, the “weak link” of the Eurozone.

The study draws on systemic functional linguistics which views language as social semiotic and conducts a transitivity analysis of a corpus consisting of 59 articles (a total of 61,820 words) from two weekly British political magazines, one of conservative and one of centre-left political position. The analysis is assisted by Wordsmith 6.0 concordance corpus tool.

It is argued that the articles of the conservative magazine construe the crisis as primarily local and financial, discussing its effects on the British economy. On the other hand, the articles of the centre-left magazine view the crisis as a systemic one derived from and, at the same time, affecting European Union policies and stress its political and economic implications in all of Eurozone.

The findings of the study contribute to the body of studies which investigate the role of language in the construction of the economic crisis and also adds to the on-going discussion regarding the development of a European public sphere as part of the wider European Project and the process of European integration.

This paper aims to examine whether the release of news about policy interventions by the troika [European Union (EU)/the European Central Bank (ECB)/International Monetary Fund (IMF)] in the crisis-affected EU countries (Cyprus, Greece, Ireland, Italy, Portugal and Spain) and whether the policy responses of these countries’ governments had impacts on the return and risk of stocks in the financial and real-economy sectors of these countries.

The paper uses a broad set of news announcements concerning the troika authorities’ policy interventions and the policy responses of the affected Eurozone states’ governments. To test for the risk and return effects of these announcements during the crisis period, a set of regression equations is estimated under a difference-in-difference approach using intercept and slope dummy variables for news releases from troika authorities and from the national governments of the six EU countries. This enables unraveling the effects of the crisis (first difference) and the effects of news announcements (second difference).

The results indicate that the involvement of the troika managed to reverse some of the unfavourable market effects of the crisis. Moreover, the policy response of national governments was found to have stronger favourable effects in the markets of the affected countries implying that investors likely waited for the response of the national governments before they reacted to the policy actions of the troika. The simultaneous release of news from the troika and from national governments had adverse effects on the returns and risk of the firms in the real economy sectors, suggesting that cross-news announcements conveyed negative information in the markets.

The paper provides evidence on the effects of policy-related news announcements on the development of the recent sovereign debt crisis in Europe. This issue is highly important, as it can reveal the effectiveness of the IMF’s and EU authorities’ policy interventions in affected Eurozone member states during the first major crisis in Europe since the monetary union.

This study aims to statistically investigate the place of the eurozone countries in the framework of the international economy and particularly within the most advanced non Euro‐currency countries; second it attempts to explain the eventual discrepancies in the performing of the eurozone from the most advanced non‐eurozone countries by the weaknesses of some eurozone members. The discriminant analysis as an investigation tool has been chosen as an as unbiased as possible investigation technique. Of course, every discriminant analysis requires classification criteria. The criteria adopted in this study result to more or less the same conclusions.

Most econometric studies prefer the popular econometric techniques employing classical regression techniques, while methods of multivariate statistics and non‐linear regressions occupy a minor place as statistical tools. Numerous and multivariate data call for multivariate techniques, which at the cost of losing information and details allow for better a perception of the data structure. Therefore, a great part of the statistical analysis focuses on multivariate techniques and non‐linear regression.

The study concludes that despite the present budget and debt crisis hitting some major and minor eurozone members the “real” economy of the eurozone posseses a first class place in the World economy – both in relative and absolute terms. During the course of the study effort was paid to balancing the tools of investigation and the fertility of the results, in particular to approach questions such as: what is present condition of the eurozone? How solid are the predictions for a hanging collapse of the euro currency and the eurozone? At the end of the study is given an apercu on the transition of the member countries to the eurozone and their economic status by the end of 2011 tries to soften the fears for the eurozone future.

This study tries to analyze the position of the eurozone countries from an arithmetic/objective perspective, ignoring as much as possible the (geo) political and national interests of the principal countries involved as an effort to check the solidity of the fears. Not all parameters of the economy can enter the study. The author has chosen a few variables, which to their opinion reflect the overall performance of an economy. Parameters relating to financial aspects have nowadays in great degree become autonomous and call for special inquiry. The study seeks to add to econometric studies carried out by national and international institutions and Universities. It mainly concerns the statistical techniques and to treat eurozone as a whole entity vs the rest of the developed non‐eurozone world. Indeed, the study tries to defend the eurozone using objective data against a multitude of gloomy predictions, raised by several world partners, for the performance and the future of the eurozone.

The purpose of this paper is to test the hypothesis that major credit rating agencies (CRAs) have been inconsistent in assessing the implications of monetary union membership for sovereign risks. It is frequently argued that CRAs have acted procyclically in their rating of sovereign debt in the European Monetary Union (EMU), underestimating sovereign risk in the early years and over-rating the lack of national monetary sovereignty since the onset of the Eurozone debt crisis. Yet, there is little direct evidence for this so far. While CRAs are quite explicit about their risk assessments concerning public debt that is denominated in foreign currency, the same cannot be said about their treatment of sovereign debt issued in the currency of a monetary union.

While CRAs are quite explicit about their risk assessments concerning public debt that is denominated in foreign currency, the same cannot be said about their treatment of sovereign debt issued in the currency of a monetary union. This paper examines the major CRAs’ methodologies for rating sovereign debt and test their sovereign credit ratings for a monetary union bonus in good times and a malus, akin to the “original sin” problem of emerging market countries, in bad times.

Using a newly compiled dataset of quarterly sovereign bond ratings from 1990 until 2012, the panel regression estimation results find strong evidence that EMU countries received a rating bonus on euro-denominated debt before the European debt crisis and a large penalty after 2010.

The crisis has brought to light that EMU countries’ euro-denominated debt may not be considered as local currency debt from a rating perspective after all.

In addition to quantifying the local currency bonus and malus, this paper shows the fundamental problem of rating sovereign debt of monetary union members and provide approaches to estimating it over time.