Euro area crisis

A prolonged crisis beginning in 2009 in which sovereign debt, banking weaknesses, and economic imbalances across the euro area threatened the euro’s stability.

European sovereign debt crisis: A crisis in which several European governments faced sharply rising borrowing costs and doubts about their ability to repay debt. Rising sovereign yields made government financing the crisis’s most visible pressure point.
Global financial crisis: A worldwide financial crisis beginning in 2007, marked by collapsing asset values, banking failures, and a deep recession. The global shock exposed fiscal and banking weaknesses across Europe.
Mario Draghi: An Italian economist who served as president of the European Central Bank from 2011 to 2019. His 2012 pledge to do what it takes helped calm fears of euro breakup.
European Stability Mechanism: An intergovernmental institution that provides financial assistance to euro-area countries facing financing difficulties. It became the euro area’s permanent crisis-lending institution after temporary rescue funds.
Asian financial crisis: A financial crisis that began in Thailand in 1997 and spread across several Asian economies. Unlike euro-area members, affected countries could adjust exchange rates and monetary policy.
European debt crisis: A broad European financial crisis marked by sovereign debt stress, banking distress, and economic contraction. This wider label captures the crisis beyond the euro area’s institutional boundaries.
Greek government-debt crisis: The fiscal and sovereign-financing crisis that began in Greece in 2009 after severe public-finance problems came to light. Greece’s debt disclosures triggered the first acute phase of euro-area turmoil.
Angela Merkel: A German politician who served as chancellor of Germany from 2005 to 2021. As Germany’s leader, she shaped the largest creditor state’s response to rescue proposals.
European Financial Stability Facility: A temporary euro-area fund created in 2010 to provide financial assistance to member states. This emergency vehicle financed early assistance programs before the permanent mechanism took over.
Latin American debt crisis: A sovereign debt crisis beginning in the early 1980s, when several Latin American governments could not service external debt. It offers a comparison with sovereign distress outside a shared European currency.

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