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-quarter in the previous four years. 3 As for the eurozone, its unemployment level had reached 12 per cent and its gross domestic product in the second quarter of 2013 was 3 per cent below its precrisis peak. 4 Short of pouring on to the streets, it is hard to see how populations, confronting an alarming future over subsequent decades, can bring meaningful pressure to bear on decision-makers, who in practical terms rarely show empathy with the plight of the millions of casualties of the crisis. Crisis summits have succeeded one another, involving people with big jobs
12.5% of gross domestic product (GDP) in 1993, to 2.5% by 1999, the year in which assessment to gauge Greece’s suitability for participation in the Eurozone was undertaken. Progress towards meeting the other criteria for nominal convergence (rate of inflation, long-term interest rates, public debt and exchange rates) was equally positive. The European Council’s decision taken at Santa Maria da Feira in June 2000 to include Greece was based on detailed scrutiny of the performance of the Greek economy, by the European Commission, the European Central Bank and the
8 The crisis spreads to the Union As well as ratifying the decision to grant the loan to Greece, the extraordinary summit of the Eurozone held on Friday 7 May 2010 discussed developments across the whole of the Eurozone. The President of the ECB, Jean-Claude Trichet, had already expressed concern that the Greek crisis could develop into a ‘systemic crisis’. American and Asian investment groups had agreed, according to Trichet, to speculate against the euro. Its value kept falling, while Spain’s and Portugal’s borrowing rates were rising rapidly, creating further
30 Cyprus The temporary improvement of the situation did not ensure peace in the Eurozone throughout the whole of 2013, as the Eurogroup, the European Commission and the IMF had hoped. In March, developments in Cyprus provoked unforeseeable and severe turmoil, indicating that the measures constructed to guard against future risk in the single-currency area were not sufficient. The risk of an economic crisis erupting in Cyprus had grown steadily following the restructuring of Greek debt in the spring of 2012. Owing to the haircut of Greek sovereign bonds, the
motion, changes and the inescapable disputes that accompany them. Greece triggered the crisis in the Eurozone, but was not the cause of it. The cause is inherent in the fact that the Eurozone is a full monetary union but an imperfect economic and fiscal union of member states with different structural features; the mature economies of the European North differ significantly from the less mature economies of the South. The current crisis is a public debt crisis only to a small degree, and in that dimension it largely concerns only Greece and Portugal. The causes of the
disadvantage millions of others. The formation of a single currency was portrayed as a seminal event. It was supposed to be the culmination of a series of top-down efforts to forge an embryo European state, one shaped around deepening economic integration. But it turned out to be a policy error as monumental as any which could be associated with imprudent national democracies. By the end of its first decade in existence, the eurozone had shown itself to be a collection of different currencies pretending to be a cohesive monetary union. Its political architects had shrunk
sector, at the beginning of June,1 sounded further alarm bells across the Eurozone. The Iberian nation’s preference was for direct support from either the EFSF or the ECB for its banks. Germany, however, favoured an official request from Spain, which would entail conditionality, comparable to the adjustment programmes in Greece, Portugal and Ireland. This time the EU moved decisively. On 9 June the Eurogroup decided to grant direct funding from the EFSF and the ESM totalling €100 billion for the recapitalisation of the Spanish banks.2 The loan would be taken up, on
order to avert and limit macroeconomic imbalances.2 This was a step that Germany had proposed in February, to monitor economic developments across the Union in a more coordinated and efficient way. Rumour and speculation grew that France and Germany were preparing a ‘Plan B’, which might entail Greece exiting the Eurozone. Intense negotiations were taking place, to which Greece had not been invited. Greek requests for involvement in the talks were rejected. The Greeks were informed that the discussion pertained to the whole Eurozone, rather than any specific country
, Spanish and Portuguese have benefits for the unemployed. (OPZZ leader Jan Guz on the 14 November 2012 European Day of Action and Solidarity) Poland is a non-member of the Eurozone. Despite this, the Polish labour movement was exposed to pressures associated with Europeanization. This was particularly the case at tripartite level; scholars at one point predicted that Polish tripartism would ready the country for membership of the euro (Meardi, 2006 ). Given this concern, a key issue is the extent to which Polish unions
recognised that the need for Greek elections was legitimate, following cross-party calls for a fresh mandate. However, many members of the Eurozone believed that they were an unnecessary risk that posed a genuine threat to any resolution of the Greek crisis. There was widespread and justified concern that the elections could detrimentally affect the economy. At the beginning of May, prior to a fresh wave of measures aimed at reducing the deficit, it emerged that discussions had already begun regarding the need for yet another bailout. The ‘new package of €14.5 billion