Small states and economic resilience : the financial crisis 2009-2015 - and Luxembourg, Cyprus, and Malta

Abstract

This thesis is about the economic resilience of small states. The small states considered are Luxembourg, Cyprus and Malta which are the smallest states in the Eurnzone. Economic resilience for these states is to be analysed in the economic Eurozone crisis in 2009-2015. The tenn economic resilience is explained extensively and is related to different variables. These variables are grouped in from categories which together give a clear picture of the economic climate of a country. Over twenty variables are separately analysed for each of the three countries over a period of eight years. The time span is from 2008, when the crisis started to 2015, when the crisis finished. The analysis covers the pre-crisis, middle-crisis, and post-crisis economic situation for Luxembourg, Cyprus and Malta. There are more variables which can be used in a resilience index but the over twenty used in this study are the most used in similar studies. This is explained better in the literature review chapter where different authors and international institutions are discussed. From each catego1y, which consist of different related variables, a score is derived. This score indicates the degree of economic resilience or vulnerability for each country in the specific variable. The scores are estimated from different methods used specifically for this study. These methods are clearly explained in the methodology chapter. All scores are exchanged to a common denominator for better comparision amongst the three countries. From the computed score a clear indication for each country is derived. This leads to the possibility of a cornparative analysis amongst the three countries. This is clearly observed with the help of graphs and tables. This study attempts to answer why Luxembourg and Malta fared better than Cyprus at the end, what were the built in policies that helped in the economic crisis and what are the individual policies in place for each country to help in economic resilience?