Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis

This paper analyses the effectiveness of bail-out mechanisms after the global crisis in comparison to Covid-19 pandemic crisis in the selected Eurozone economies. It seems that in the circumstances of global instability, laissez-faire rules in economy are not enough, meaning that government interven...

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Autores principales:	Beljić Marina, Glavaški Olgica
Formato:	article
Lenguaje:	EN SR
Publicado:	University of Novi Sad - Faculty of Economics, Subotica 2021
Materias:	bail-out global crisis pandemic crisis eurozone economies Business HF5001-6182 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/4c51c9c89692471cb19ede80c4aeaa65
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id	oai:doaj.org-article:4c51c9c89692471cb19ede80c4aeaa65
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spelling	oai:doaj.org-article:4c51c9c89692471cb19ede80c4aeaa652021-12-05T18:00:54ZEffectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis0350-21202683-416210.5937/AnEkSub2145079Bhttps://doaj.org/article/4c51c9c89692471cb19ede80c4aeaa652021-01-01T00:00:00Zhttps://scindeks-clanci.ceon.rs/data/pdf/0350-2120/2021/0350-21202145079B.pdfhttps://doaj.org/toc/0350-2120https://doaj.org/toc/2683-4162This paper analyses the effectiveness of bail-out mechanisms after the global crisis in comparison to Covid-19 pandemic crisis in the selected Eurozone economies. It seems that in the circumstances of global instability, laissez-faire rules in economy are not enough, meaning that government interventions are desirable and unavoidable. In the Eurozone, the implementation of bail-out programs is related with the problem of a new "impossible trinity" and no-bail out clause. However, the adopted clause on non-use of the bail-out mechanism has had to be ignored several times in the past, and those implementations of bail-outs are focus of this paper. The research is based on descriptive statistical analysis and fixed panel model specification using available data in relation to the bail-out programs in the period 2011-2020 in selected Eurozone economies. The research shows that governments appear to have learned at least three lessons from the global crisis in relation to the bail-out mechanisms: (a) the need for quick implementation of emergency measures, (b) the bail-out mechanism was effective in reducing the fiscal deficit, however, caused an increase in the public debt, and (c) strengthening the fiscal framework of the Eurozone economies by defining supranational fiscal rules remains the essence of a stronger Eurozone and the European Union.Beljić MarinaGlavaški OlgicaUniversity of Novi Sad - Faculty of Economics, Suboticaarticlebail-outglobal crisispandemic crisiseurozone economiesBusinessHF5001-6182FinanceHG1-9999ENSRAnali Ekonomskog fakulteta u Subotici, Vol 57, Iss 45, Pp 79-95 (2021)
institution	DOAJ
collection	DOAJ
language	EN SR
topic	bail-out global crisis pandemic crisis eurozone economies Business HF5001-6182 Finance HG1-9999
spellingShingle	bail-out global crisis pandemic crisis eurozone economies Business HF5001-6182 Finance HG1-9999 Beljić Marina Glavaški Olgica Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
description	This paper analyses the effectiveness of bail-out mechanisms after the global crisis in comparison to Covid-19 pandemic crisis in the selected Eurozone economies. It seems that in the circumstances of global instability, laissez-faire rules in economy are not enough, meaning that government interventions are desirable and unavoidable. In the Eurozone, the implementation of bail-out programs is related with the problem of a new "impossible trinity" and no-bail out clause. However, the adopted clause on non-use of the bail-out mechanism has had to be ignored several times in the past, and those implementations of bail-outs are focus of this paper. The research is based on descriptive statistical analysis and fixed panel model specification using available data in relation to the bail-out programs in the period 2011-2020 in selected Eurozone economies. The research shows that governments appear to have learned at least three lessons from the global crisis in relation to the bail-out mechanisms: (a) the need for quick implementation of emergency measures, (b) the bail-out mechanism was effective in reducing the fiscal deficit, however, caused an increase in the public debt, and (c) strengthening the fiscal framework of the Eurozone economies by defining supranational fiscal rules remains the essence of a stronger Eurozone and the European Union.
format	article
author	Beljić Marina Glavaški Olgica
author_facet	Beljić Marina Glavaški Olgica
author_sort	Beljić Marina
title	Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
title_short	Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
title_full	Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
title_fullStr	Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
title_full_unstemmed	Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis
title_sort	effectiveness of bail-out mechanisms in the eurozone: global vs. pandemic crisis
publisher	University of Novi Sad - Faculty of Economics, Subotica
publishDate	2021
url	https://doaj.org/article/4c51c9c89692471cb19ede80c4aeaa65
work_keys_str_mv	AT beljicmarina effectivenessofbailoutmechanismsintheeurozoneglobalvspandemiccrisis AT glavaskiolgica effectivenessofbailoutmechanismsintheeurozoneglobalvspandemiccrisis
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Effectiveness of bail-out mechanisms in the Eurozone: Global vs. pandemic crisis

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