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The Greek case
Author: Costas Simitis

The book examines the European debt crisis with particular reference to the case of Greece. It investigates its spillover from a Greek-specific problem to a Eurozone-wide crisis and chronicles the policy responses to combat it. The central argument of the book is that the principal cause of the Eurozone’s problems was, and still remains, the indecisiveness of European elites to tackle its underlying deficiencies. Leading Eurozone countries have been unwilling to commit to a common long-term plan which could deal convincingly with complex and inter-related problems affecting both its ‘core’ and its ‘periphery’. The guiding principle of policy responses thus far has been the pursuit of permanent fiscal discipline. Yet, fiscal discipline alone would not provide the long-term solutions required; a steady course towards economic governance and political unification is necessary.

Through the detailed tracing of the evolution of the crisis, the book provides valuable insights into the crucial interconnection between Greece’s own economic troubles and the wider European search for macroeconomic stability and sustainable economic growth. As such, the book appeals well beyond those with a narrow academic interest in Greece. This is very much a discussion about the future of the Eurozone and the European Union as a whole.

Costas Simitis

. The EU has still not designed a rounded policy of economic governance, a new way of dealing with imbalances between the developed Core and the less developed Periphery. It has not formulated procedures for the systematic promotion of economic growth, which would distribute the benefits to all members in as balanced a way as possible.4 The absence of a general consensus on the direction of the EU, and differences provoked by this absence of clarity, together with the ineffective efforts to control the crisis, have affected European public opinion negatively; the

in The European debt crisis
Costas Simitis

President of the European Council announced, at the end of the negotiations, that it was possible that the Compact would be subscribed to by all the members of the EU, aside from the UK, which had already made its disdain for the agreement apparent. The terms ‘economic policy’ and ‘economic governance’ in the text were used to legitimise and underwrite stricter fiscal discipline. Key European protagonists hailed this as a significant step forwards in achieving improved coherence and stability in the operation of the Eurozone. ‘This is an extremely good result for the

in The European debt crisis
Abstract only
The decisions of 21 July 2011
Costas Simitis

120 Part III: Debt restructuring and power games agreed to the establishment of a technical assistance programme for Greece, and gave limited further discussion to the idea of economic governance and oversight of member states’ economic policy. It was a routine meeting and the scope of any progress was limited. In Greece its prescriptions were framed in terms of a small temporal allowance: ‘they are keeping us on life support, while at the same time they are asking us to implement an adjustment programme that is exceptionally difficult to carry out, in terms of

in The European debt crisis
Costas Simitis

10 An ‘all-encompassing plan’ to solve the crisis in the Eurozone? In the Eurozone, the more economically stable nations had begun efforts to develop a holistic and ‘all-encompassing plan’. At a meeting held on 17 January 2011, they examined a series of initiatives such as increasing EFSF funds, bringing forward the establishment of a permanent stability mechanism, reforming the Stability Pact and instituting common economic governance. Negotiations, however, did not produce any results. The European Council summit held at the beginning of February 2011 made

in The European debt crisis
Costas Simitis

achieving the long-discussed common economic governance but, even though an institution of common crisis management was indeed established, this was not the case. Dealing collectively with crises does not constitute a common fiscal policy nor a common economic policy; it does not create a coherent framework for common economic governance. The crisis had thus led to the establishment of a framework for regulation and support, in form of the EFSF, but the underlying causes of the turbulence had not been addressed. The members of the EU continued to maintain that strict

in The European debt crisis
Costas Simitis

such a move would free capital to address the far greater risk posed by instability in Spain and Italy; it would also permit more expedient reform towards a comprehensive framework for the long-discussed model for ‘economic governance’ and fiscal union.7 This harsh appraisal of Greece’s place in Europe was detailed in the ‘­Iphigenia scenario’8 – a proposal by the British Chancellor of the Exchequer. According to this, Greece would have to be sacrificed so the ‘tail winds’ could return to the EU. The sacrifice of Greece was to take the form of a voluntary exit from

in The European debt crisis
Open Access (free)
Stan Metcalfe and Alan Warde

activity, its principal mode of rational calculation being suitable to all spheres of life. The market is the epitome of efficiency in the allocation of resources and is unfailingly superior to any other system of economic governance. The market is the best guarantor of reliable quality in products and services. The market guarantees sustained growth in standards of living in all countries, whatever their level of development. ● ● ● ● ● ● The power of the discourse operates in several modes: as political rhetoric, in business practice and through the ghostly role

in Market relations and the competitive process
Abstract only
Costas Simitis

progress with the Memorandum reforms. Finally, it was agreed that the EFSF funds would be augmented through ‘leveraging’.1 On 4 October the Council of General Affairs (bringing together the EU’s foreign ministers) approved the compromise reached with the European Parliament regarding the reform of the framework for economic governance. These reforms strengthened the rules of fiscal discipline, and were designed to ensure the continued reduction of the deficit and debt of member states. The Council also approved the supervision of the economic policy of all countries, in

in The European debt crisis
Costas Simitis

the figures it contained. The increasingly prevalent view, most notably in France, was that major intervention in Greece was required. It would counter the risk of contagion to Portugal, Spain or any other nations with worrying levels of debt. The crisis provided the opportunity to ‘proceed to real economic governance’, as opposed Greece.indb 36 3/13/2014 1:56:36 PM Ineffective solutions 37 to just the rhetoric of such a notion that existed before. The solution proposed was an ‘IMF plan without funding’ to be imposed on Greece. The belief was that a statement of

in The European debt crisis