The EU Economy: The Eurozone in 2010 *

Last year’s JCMS Annual Review saw Greece in dire fiscal straits after the true scale of government borrowing in the years leading up to the global financial crisis came to light (Hodson, 2010). By the beginning of 2010, it had become clear that the Greek government would be unable to weather this fiscal storm without outside help from Brussels or further afield. It took several long months of protracted negotiation, however, before eurozone heads of state or government reluctantly agreed in May 2010 on a €110 billion package of loans for Athens co-financed by the European Union (EU) and the International Monetary Fund (IMF). This decision was, to paraphrase Winston Churchill, not so much the beginning of the end for the eurozone’s sovereign debt crisis as the end of the beginning. Fears that other eurozone members might share Greece’s fate saw the EU and IMF set aside up to €720 billion in loans and credit guarantees, with the former pledging €60 billion of this sum via a newly created European financial stabilization mechanism and €440 billion through a new European financial stability facility. Ireland became the first country to tap these funds in November 2010, securing €67.5 billion in