Analysis of the European Financial Crisis

Sanela Porca, Patrick Joachim Stiebinger
(School of Business Administration, University of South Carolina Aiken, 29801 Aiken, South Carolina, USA)

Abstract: The goal of this research is to examine the validity of the European Monetary Union Maastricht Convergence criteria under the current economic and monetary conditions of the European Union. By using the case study of the four European Monetary Union member economies which are currently experiencing severe monetary struggles—Greece, Italy, Spain, and Portugal—the Maastricht Convergence Admission criteria to the EMU are re-evaluated. Would Greece, Italy, Spain, and Portugal be accepted to the European Monetary Union under their current economic conditions? Are there weaknesses to the European Monetary Union Admission criteria that need to be revisited and revised? Based on the findings of the current research, policy recommendations are derived.

Key words: international trade; factor movements; international finance

JEL codes: F2, F3