Howarth, David, and Lucia Quaglia. "The Political Economy of the Euroarea’s Sovereign Debt Crisis". Review of International Political Economy, Vol.22, No.3 (2015): 457-484.

Howarth, David, and Lucia Quaglia. "The Political Economy of the Euroarea’s Sovereign Debt Crisis". Review of International Political Economy, Vol.22, No.3 (2015): 457-484.

• The 2008 financial crisis triggered a sovereign debt crisis in the Eurozone's periphery and a general economic crisis across the EU. The sovereign debt crisis then triggered a number of banking crises in Europe (457-458).
• In some countries, namely Ireland and Spain, the 2007-2009 international financial crisis was a direct cause of later sovereign debt crisis, as bailouts of major Irish and Spanish banks increased the public debt burden (459, 466).
• The sovereign debt crisis led to a general banking crisis because many banks, especially Greek and Italian banks, held large amounts of government debt, meaning that the decline in its estimated value threatened the solvency of domestic banks (467).
• The EU's uncoordinated and slow response to the sovereign debt crisis increased the severity of the crisis, as it fueled speculation that peripheral countries would drop out of the Eurozone and return to their previous national currencies. These worries exerted upward pressure on bond yield rates (463-464).
• The sovereign debt crisis should be recognized as primarily a balance-of-payments crisis within the EU, despite all counties have the same currency. The trade imbalance between surplus countries like Germany and deficit countries like Greece was possible only because banks had largely had the surplus from the trade imbalance available to debtor countries in the form of loans (465).
• The financial systems of Eastern European countries are largely dominated by foreign banks, with foreign banks holding 90% of all bank assets in Estonia, Czechia, and Slovakia. Foreign banks were more likely to encourage loans denominated in foreign currency, which exposed debtors to the effects of currency devaluation during the crisis, and they were also more likely to simply abandon failing markets, as German banks did in Greece (460).
• The dominance of foreign banks in Eastern Europe meant that there was significant nationalist public backlash against foreign banks during the financial crisis. In Hungary, this took the form of Viktor Orban's government imposing greater taxes on foreign banks and generally used nationalist sentiment to ignore the economic advice of the EU and IMF (461).
• Prior to the 2008 financial crisis, the IMF had mostly provided assistance to developing countries, with the exception of interventions in the UK and Italy during the stagflationary crisis of the 1970s. It provided financial assistance to Hungary, Latvia, and Romania during the initial financial crisis, and was also heavily involved in the sovereign debt crisis, contributing ⅓ of all financing to Spain, Portugal, Greece, and Ireland, and also being a major player in bailing out Cyprus (461).
• The IMF imposed conditions on all countries accepting its loans and worked alongside the EU to ensure that both organization's conditions were met and debt repaid. By 2010, the IMF joined with the EU and the European Central Bank [ECB] as a 'troika' that collectively negotiated the conditions for financial assistance and monitored their implementation (461).
• Despite working together, IMF and EU disagreed on what conditions should be imposed, with the EU generally demanding more austerity than the IMF recommended (462).
• The EU may have felt emboldened to demand strict austerity and impose harsh burdens on debtor states, transferring the costs of adjustment from capital to labor, because it believed that the IMF would absorb most of the blame and leave the EU largely untainted (462).
• The terms of the European Monetary Union outlined in the Maastricht Treaty may have encouraged investors to make riskier decisions about investing in sovereign debt than they would otherwise have, because the single currency nullified any risk of devaluation and the strong and independent mandate of the ECB reduced the risk of inflation. The only remaining risk was that countries would default on their debts, which investors largely ignored as a possibility (463).
• Hungary demonstrates that market discipline was not necessarily pushing for austerity, as the unorthodox economic policies pursued by the Orban government did not result in significantly higher bond yields, despite repeated warnings by the IMF and ratings agencies (464).
• The European Monetary Union contained several structural weaknesses that left it exposed to financial and economic crises: the creation of a monetary union without a complementary fiscal union, the creation of a unified banking system without any supranational regulatory body, and the absence of an economic hegemon in the Eurozone (464). 
• The intensity of the Euro Crisis was impacted by Germany's unwillingness to act as a financial hegemon, leaving no one responsible for the wellbeing of the euro. Germany refused to step into the role as hegemon because of its own domestic politics and concerns that its hegemony might create a moral hazard that could encourage further recklessness (466).
• These faults were pointed out in the early 1990s, but were overruled for political reasons. Germany, in particular, opposed a fiscal union for infringing on national sovereignty and because they feared it could created a 'moral hazard' that encouraged profligate states to spend more wildly (464-465). Other concerns about the inflation pressures in southern European economies were dismissed because it was assumed this would be solved by 'market discipline' (465).
• Eurozone states have implemented three main types of reforms to respond to structural issues inherent in the European Monetary Union: measures to enforce fiscal discipline and a common EU fiscal policy, championed by Germany; the creation of mechanisms to purchase European government debt and thus reduce bond yield rates, promoted by France, peripheral states, and the European Commission; and the creation of a common bank regulatory for the EU, which passed despite German opposition (467-468).
• Since 2010, the EU has adopted a number of fiscal policy regulations, including the Six Pack, the Two Pack, and the Treaty on Stability, Coordination, and Governance. It is unclear whether these will be any more successful than prior EU fiscal policies, like the failed Stability and Growth Pact, especially under crisis conditions (468-469). The fact that the Treaty on Stability, Coordination, and Governance was immediately ignored by multiple EU countries does not bode well for its future (470).
• These fiscal policy rules were championed by Germany and are meant to emulate the Germany schuldenbremse law. This law was already copied by Austria and Slovakia, but new EU laws have resulted in a similar version being enacted by 2020 in many EU countries, including Spain and Italy (469).
• The creation of the European Financial Stability Facility, and its permanent replacement, the European Stability Mechanism, gives the EU its own body to deal with internal balance-of-payments crises separate from the IMF (470). The laws governing these bodies essentially extend existing rules on balance-of-payments with non-euro countries within the Eurozone (472).
• The European Financial Stability Facility, created in 2010, was hobbled by Germany with a small amount of funding, to have its action limited by consensus among all member states, and to be a purely temporary body that would abolish itself in 2013. The failure of the Facility, as well as a new banking crisis in Greece, led the Germans to abandon their opposition and agree to broader interventions by the Facility as well as the creation of a permanent European Stability Mechanism (472-473).
• The creation of these bodies ends a debate between France and Germany from the 1950s over whether such a body should be organized, with Germany arguing its created a moral hazard and France arguing its necessity. A similar proposal was made by Robert Triffin in 1957 to avoid speculation between European currencies (470-471).
• The need for a reserve fund within the EU was raised by the Governor of the Banque de France, Jacques de Larosiere, in 1988 during the meetings of the Delors Committee, convened to design the European Monetary Union, but was dismissed because it was assumed that the monetary union would end the risk of currency account crises within the Eurozone (471-472).
• Banking union was meant to address the vicious circle between sovereign debt and national bank solvency by transferring responsibility for banks to the EU. It also responded to situations wherein national governments could not act a lender of last resort (474). The ECB was made responsible for supervising banking, including the liquidation of failing banks, and also given control of the Single Resolution Mechanism, although that itself was composed of and led by national regulators (475), and incorporated veto power by all members (476).
• The EU banking union was proposed by the presidents of the ECB, European Commission, European Council, and the Eurogroup in 2012 in the Van Rompuy Report. The banking union creates an international supervisory body for banks and international mechanisms to provide support and guarantee deposits (473).
• There was significant disagreement among Eurozone members about the specifics of the banking union, meaning it took a very long time to negotiate. Italy, Spain, and France all supporting banking union as soon as possible, while Germany tried to slow down the process (474-475). Germany also strongly opposed a common deposit guarantee system, which was supported by France and peripheral countries, and it dropped from the agenda of the banking union by December 2012 (475-476).
• There was a proposal by the European Commission to issue 'euro bonds' collectively, allowing peripheral countries to borrow at much lower rates. This was shut down in 2011 by German opposition due to fear of a moral hazard created by lower interest rates on debt (473).
• Entire article is a source mine on issues regarding the EU, European Monetary Union, the IMF, fiscal policy regulations, sovereign debt crises, the Euro Crisis, the 2008 financial crisis, bond yield rates, European banking systems, and austerity.