Shocks and Time: The Development of the European Financial Assistance Regime

This paper analyses the impact of economic crises on the development of European financial assistance. It demonstrates that crisis episodes that have taken place over the last five decades have significantly altered the design of European Union emergency support. This paper illustrates how solutions adopted in formative moments–including the 1973 oil shock, the Eurozone crisis, and the Covid-19 pandemic–and their long-term consequences led to the smorgasbord of instruments of the present financial assistance structure. By applying a historical institutionalist approach, combining insights from studies of critical junctures and gradual change, this contribution explains how economic shocks contributed to change in financial assistance, while also highlighting mechanisms that led to the continuation of specific elements of the assistance structure.