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(Revised from original 2012 version)
Can the Eurozone Survive?
The sovereign debt crisis that took Greece by storm in 2010 began to spread to other European markets. Within a few months Ireland and Portugal had also lost access to the sovereign debt markets and had to rely on supranational loans for their financing. The risk of further contagion was clear and present. Political leaders continued to seek measures to stem the crisis and to avoid the larger economies of Spain and Italy becoming involved. The European financial system became strained. Banks were found to be undercapitalized and began to ration credit to the economy. The European Central Bank intervened to provide liquidity to the system in order to avoid a credit crunch. Could the eurozone survive the storm?
Keywords: sovereign debt crisis;
Borrowing and Debt;
Currency Exchange Rate;
Roscini, Dante, and Jonathan Schlefer. "Can the Eurozone Survive?" Harvard Business School Case 713-034, May 2013. (Revised from original September 2012 version.)