engleski

Financial crisis in Croatia and Slovenia: the crisis of europeanisation through badly managed economic integration

This paper deals with the economic and political impact of the Euro Crisis in Slovenia and Croatia. The author pursues the argument that, despite their initial divergence in terms of the adopted economic policies and the historical context at the beginning of their statehood, both countries started to converge around a similar economic model at the turn of the 21st century. This model is based on the financialisation of economy that boosts growth by rapidly rising the levels of private and public debt. Despite the initial progress and success in instituting the market economy and consolidating democracy, the positive impact of Europeanisation started to fade as a consequence of the clash between the contentious and problematic model of economic integration of respective countries with the EU core and the structural power of finance at the EU level. The interplay between the asymmetric and increasingly financialised economic structure at the EU (Eurozone) level and the national accumulation strategies (powered by unreformed institutions) of the peripheral countries created a toxic mix conducive to falling levels of trust in the national and EU institutions as well as to rising poverty and unemployment. The main challenge of reversing this dangerous trend is addressed in the last chapter of this paper. The author advocates an innovative combination of inflationary and deflationary measures to implement “beautiful deleveraging” as a means of reducing unsustainable debt burdens and restoring confidence in political institutions.

Slovenia ; Croatia ; financialisation ; euroisation ; debt ; deleveraging ; crisis

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