The project analyzes how societies’ vulnerabilities to different types of policy responses to the crisis affects their willingness to engage in policies that constribute to a sustainable solution of the euro  crisis. The argument builds on the insight that the euro crisis is, at its root, a balance-of-payments crisis and argues that the resulting distributive struggles surrounding the politics of the euro crisis in surplus and deficit countries are distinct but related, and should therefore be analyzed in a unified framework. The vulnerability to internal reforms is inversely related to the willingness to support (in surplus countries) or demand (in deficit countries) transfer payments to crisis countries.

Empirically, the project examines how vulnerability profiles affect domestic crisis politics and policies on two levels of analysis, the interest-group and the national level. It uses a mixed-methods research design that combines two sets of qualitative comparative case studies of the domestic politics of the euro crisis in surplus and deficit countries, respectively, with a quantitative analysis of national vulnerability profiles and crisis politics in a wider set of countries. The overarching goal of the project is to generate an encompassing picture of the distributional politics of the euro crisis and a better understanding of the constraints under which European policymakers operate in their attempts to solve the crisis.