Forthcoming in THE CONSEQUENCES OF THE GLOBAL FINANCIAL CRISIS, eds

All European member-states have been hit by the economic crisis, but some have been harder hit than others. The ‘liberal market economies’ (LMEs) of Anglophone countries, consisting of Britain and Ireland as well as the United States, long the darlings of the markets and the pundits, have this time been hardest hit, with their credit-fueled finance-driven model of growth having been at the heart of the crisis itself. The ‘coordinated market economies’ (CMEs) of Continental and Nordic Europe, encompassing Germany and the smaller European countries in these two regions, have in contrast seemingly sailed through, with their balanced model of export-fueled growth jeopardized mainly by the exposure of their banks to bad loans picked up in the LMEs. The other countries of Western Europe, generally left unlabeled by the Varieties of Capitalism school of political economy but which I call the ‘state-influenced market economies’ of Continental and Mediterranean Europe (SMEs) because of the defining role of the state, including France, Italy, and Spain along with Greece and Portugal, have had varied responses. While France has had a pretty good crisis, Italy’s has been bad and Spain’s has been ugly, although it has so far been nothing like the sovereign debt disaster that struck Greece and then overtook Portugal as well as Ireland.