European Integration and Capitalist Diversity on Europe's Eastern Periphery

The European Union is full of peripheral states in big troubles. Understandably, most attention has been focused on the countries on Europe’s southern periphery, and Ireland, which have teetered on the brink of sovereign default. There is much less awareness among Europeanists that Europe’s eastern periphery has also undergone major economic crises in recent years. Yet while the crisis had a deep impact, recovery also came remarkably fast, at least compared to Southern Europe. This paper is concerned with understanding, from the vantage point of the crisis experience, how European integration and domestic varieties of capitalism have interacted to a) make East European countries highly vulnerable to the crisis, and b) enable a comparatively fast recovery after the crisis. It is argued that though European integration has made some Eastern European countries more vulnerable to international financial crisis, their capacity to adjust quicker than southern European countries is largely due to their unique domestic-institutional configurations and growth strategies, as well as other external factors.