In this report, we outline how the eurozone crisis has evolved. We discuss how European Monetary Union (EMU) membership shaped both the economic crisis itself and the crisis response.
The peripheral countries are at very different stages of economic recovery and rebalancing. Growth has returned and private and public balances have improved. Unemployment and public debt levels remain high, whilst part of the rebalancing may just be cyclical.
The severe economic problems Cyprus faced in 2012-2013 were to large extent a private sector debt (banking) problem. A central element of the crisis response in Cyprus was the concept of bail-in.