This paper conducts a comparative examination of government responses to the financial crises in Europe since 2008. Its special focus is on the banking system and the variation in state intervention in the form of bank bailouts through nationalization, recapitalization, debt restructuring, sale, etc. The paper examines the varieties of government policies in relationship to public spending and economic growth measures on the example of key states representative of the Southern European/Mediterranean model of capitalism: Greece, Italy, and Spain. The paper asks the following questions: How have the national varieties of the crisis informed national responses against a common regional and global context? Is the widely shared institutional model of Southern European capitalism evolving, and in what direction: within-group convergence, liberalization, Europeanization, or further “nationalization” accomplished through differentiated structural reforms? The paper provides evidence of the resilience of the varieties of capitalism framework reflected in its capacity to explain the variation of government responses despite market and contagion pressures. It draws conclusions with regard to the opportunities for institutional renewal in Southern Europe as a source of economic restructuring, with regard to national competitiveness and economic growth.
