Financial Crises in Iceland and Ireland: Does European Union and Euro Membership Matter?

• Published in: JCMS: Journal of Common Market Studies
• Main Authors: THORHALLSSON, BALDUR, KIRBY, PEADAR
• Format: Article in Journal/Newspaper
• Language: English
• Published: Wiley 2012
• Subjects: Iceland
• Online Access: http://dx.doi.org/10.1111/j.1468-5965.2012.02258.x; https://api.wiley.com/onlinelibrary/tdm/v1/articles/10.1111%2Fj.1468-5965.2012.02258.x; https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1468-5965.2012.02258.x

Abstract The article examines the claims of the small states literature on the importance of alliance formation. It applies it to the case of Ireland and Iceland and asks whether membership of the EU and euro in Ireland and the absence of these in Iceland had a say in their reduction of risk before the financial crisis, assistance in absorbing the shock of their crash and help in recovering after it. The article argues that the notion of shelter needs to take more account of domestic arrangements and the shelter's costs though the cases confirm the importance of alliance formation.