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
20 The new agreement with the Eurozone (the second Memorandum) and private sector involvement Anxiety swiftly returned to Greece after the summit of 9 December 2011. The government’s primary concern was to satisfy the preconditions required for the release of the €130 billion loan. Two agreements needed to be drawn up. The first concerned the conditions of the loan. It would clarify the still unclear arrangements for the new fiscal measures and the structural changes needed to achieve the agreed targets. In sum, this constituted the new Memorandum. The second
migrants from the Sea-Watch 3 ( Longhin, 2019 ). 15 On the history of the DGzRS, see Anders et al. (1997) and Claußen (2015) . 16 On the sinking of the Johanna , see Schramm (2009) . 17 Arguably, the idea of Europe was also challenged by the Eurozone countries’ response to the Greek debt crisis, and the German Willkommenskultur was also a reaction to the reputational damage perceived by Germans as a result of Germany’s role in that response (see Neumann, 2016 ). 18 An article in the online edition of the Bremen daily Weser
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.
Since 2010, five Eurozone governments in economic difficulty have received assistance from international lenders on condition that certain policies specified in the Memoranda of Understanding were implemented. How did negotiations take place in this context? What room for manoeuvre did the governments of these countries have? After conditionality, to what extent were governments willing and able to roll back changes imposed on them by the international lenders? Do we find variation across governments, and, if so, why?
This book addresses these questions. It explores the constraints on national executives in the five bailed out countries of the Eurozone during and beyond the crisis (2008–2019).
The book’s principal idea is that, despite international market pressure and creditors’ conditionality, governments had some room for manoeuvre during a bailout and were able to advocate, resist, shape or roll back some of the policies demanded by external actors. Under certain circumstances, domestic actors were also able to exploit the constraint of conditionality to their own advantage. The book additionally shows that after a bailout programme governments could use their discretion to reverse measures in order to attain the greatest benefits at a lower cost. It finally explores the determinants of bargaining leverage – and stresses the importance of credibility.
The European Union (EU) is faced by the Eurozone crisis, the rise of anti-EU populism and 'Brexit'. In its immediate neighbourhood it is confronted by a range of challenges and threats. This book explores the origins of the term 'Europeanisation' and the way in which its contemporary iteration-EU-isation-has become associated with the normative power of the EU. The concept of European identity is discussed, with an indication that there are different levels of identity of which a European consciousness can be just one. An overview of different mechanisms the EU uses to promote EU-isation in the neighbourhood and a discussion on the limits of conditionality when membership is not on offer is also included. The book discusses these themes in more detail. It powerfully states the salience of Russia in establishing an alternative geopolitical pole to the EU. The presence of Russia as the Eurasian Economic Union appears to play the role of being a way of preserving traditional conservative values in contrast to the uncomfortable challenges of EU-isation. The Balkans' and Turkey's reception of EU-isation is not affected by the experience of being in-betweeners. The book examines the issue of EU-isation and the relationship between values (norms), interests and identity based on various sectors/themes which cut across different neighbours and are core elements in their relations with the EU.
This highly original book constitutes one of the first attempts to examine the problem of distributive justice in the EU in a systematic manner. The author starts by arguing that the set of shared political institutions at EU level, including the European Parliament and the Court of Justice of the EU, generate democratic duties of redistribution amongst EU citizens. Furthermore, he claims that the economic structure of the EU, comprising a common market, a common currency, and a free-movement area, triggers duties of reciprocity amongst member states. He contends that the responsibilities to fulfil these duties should be shared by three levels of government – local, national, and supranational. More specifically, he argues that the EU should act as a safety net to the national welfare systems, applying the principle of subsidiarity. In turn, the common market and the Eurozone should balance efficiency targets with distributive concerns. Concrete policy proposals presented in this book include a threshold of basic goods for all EU citizens, an EU Labour Code, a minimum EU corporate tax rate, and an EU Fund for Global Competitiveness. These proposals are thoroughly examined from the standpoint of feasibility. The author argues that his proposals fit in the political culture of the member states, are economically feasible, can be translated into functioning institutions and policies, and are consistent with the limited degree of social solidarity in Europe. This book is a major contribution to the understanding of how a just Europe would look and what it takes to get us there.
Cooperation and trust were increasingly scarce commodities in the inner councils of the EU. This book explores why the boldest initiative in the sixty-year quest to achieve a borderless Europe has exploded in the face of the EU. A close examination of each stage of the EU financial emergency that offers evidence that the European values that are supposed to provide solidarity within the twenty eight-member EU in good times and bad are flimsy and thinly distributed. The book aims to show that it is possible to view the difficulties of the EU as rooted in much longer-term decision-making. It begins with an exploration of the long-term preparations that were made to create a single currency encompassing a large part of the European Union. The book then examines the different ways in which the European Union seized the initiative from the European nation-state, from the formation of the Coal and Steel Community to the Maastricht Treaty. It focuses on the role of France and Germany in the EU. Difficulties that have arisen for the EU as it has tried to foster a new European consciousness are discussed next. The increasingly strained relationship between the EU and the democratic process is also examined. The book discusses the evolution of the crisis in the eurozone and the shortcomings which have impeded the EU from bringing it under control. It ends with a portrait of a European Union in 2013 wracked by mutual suspicions.
25 Cracks in the euro The effects of the Greek crisis on the Eurozone became more and more visible during the Greek election campaigns in May and June 2012. Anxiety over the cohesion of the EMU grew. The Financial Times published a commentary entitled the ‘Euro starts to crack’.1 Various central banks and investors had become increasingly wary, no longer purchasing securities in euros as they had done. By the end of May, the exchange rate of the euro against the dollar fell below the level it had been on 30 June 2010, when the Greek crisis began.2 The markets
indications that the crisis was indeed spreading: industrial output had fallen dramatically and the rate of growth had dropped to a level of virtually zero across most of the Union. Alarm bells went off in the Eurozone. Banks started selling off their sover eign bonds, they avoided subscribing to newly issued bonds by Italy and Spain, and they did not renew their loans to smaller banks. A crisis in liquidity looked increasingly likely. The International Herald Tribune noted that ‘two years of gross mismanagement of the Eurozone debt crisis have all too predictably