1. Understanding Success and Failure in Financial Crisis Management

The chapter provides an introduction into the main themes of the research. First it introduces the central question of the book: what factors determined the economic and political outcomes of financial crisis management in European Union (EU) member states, which needed a financial assistance program? After documenting the differences in recovery from the crisis, the next part of the chapter provides an overview of the main narratives surrounding the assessment of crisis management: explanations focusing on economic fundamentals, accounts emphasizing the possibility for exchange rate devaluation, and finally the debate over austerity, which has largely dominated assessments of success and failure. After pointing to the shortcomings of these narratives, the research is situated within institutionalist explanations. Through viewing crisis management as a series of relationships, the research emphasizes the crucial importance of trust. The third section provides an elaboration of the theory on trust, institutions, and their relevance for the management of the final crisis. The fourth section discusses methodology, and the chapter concludes with an overview about the structure of the book.