3. The Great European Recession

This chapter describes the shaping of the Great European Recession from three perspectives. The first presents the economic and social costs of the great recession. The second addresses the redistribution consequences of the crisis among, and within, EU member states (debtor/creditor countries, southern/northern countries). The third compares European recovery to the recovery in the United States, as well as to interregional convergence and divergence tendencies. Hence, a dynamic image emerges of the costs incurred during the crisis evolution in terms of the relative position of the European economy within the western world. The image that emerges points to the conclusion that the political maneuvers undertaken to date have transferred much of the crisis costs to the future. Hence, to assess the size of the crisis, its continuing evolution will play a significant role. If the collapse of the Eurozone is avoided then the direct costs, although still being the largest in postwar history, will be manageable and recognized as costs of the past. Should default occur, however, then the costs will surpass any rational assessment.