From the Financial to the Sovereign Debt Crisis: New Trends in Public Law

di Giulio Napolitano

The 2008 financial crisis cast doubt on the fundamental assumptions and theories, developed over the last two decades, advocating the retreat of the State and the rise of markets’ dominance over governments. The crisis forced governments to nationalize banks, financial institutions, and other strategic companies. Policies of deregulation nderwent serious attacks and regulatory reforms became a policy agenda priority. The 2010 sovereign debt crisis suddenly reversed these trends. Extraordinary taxation measures and public expenditure cuts were adopted. Safety nets were established, at international and European levels. The doubly shocking experience of the financial market failure and of the sovereign debt crisis led governments “into the storm”. To resolve these crises, governments must implement exceptional mutations in both external and internal frontiers of government, mutations which challenge many fundamental assumptions of public law.