The second one adds two dummy variables, euro*core and euro*GIIPS, being one for core, or alternatively, GUPS countries after 1999 and null otherwise.
4) Averages over 1996-2009 GUPS Non-euro Manufacture 98.
Five years later, Germany's credit mushroomed to 729 billion [euro], whereas GUPS credit flipped to a debit of 66 billion [euro] (Figure 3).
Indeed, the accelerating run on the GUPS banking system induced the formation of a complex web of liquidity infusions by the Eurozone's institutions: the creation of the EFSF (The European Financial Stability Facility) in 2010, established as a temporary rescue mechanism to provide credit assistance; the use of LTROs (Three-year Long Term Refinancing Operations) in 2011-2012; on 22 December 2011, the European Central Bank (ECB) started its LTROs.
The economic benefits of the Eurozone to Germany and GUPS were initially frontloaded.
The Eurozone crisis forced GUPS to confront the costs of their excessive borrowing before the crisis, as the crisis terminated the countries' easy access to funding their current accounts and addressing their growing fiscal deficits.
I compare the development of these WGI indicators in the GUPS countries (which have been Eurozone members since 1999/2001) with that of the NMS countries (here: Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania; which had not yet entered the Eurozone within the considered period 1996-2012) and Germany (as a kind of benchmark member country).
In particular, there was real divergence with respect to institutional and structural alignment in some of the GUPS countries after accession to the EMU, particularly after 2009.
Even if this may trigger transitory real or GDP per capita convergence, 'it often ends up in bubbles and an eventual counter-development towards real divergence (currently seen, for example, in some of the GUPS countries)' (ibid.