circle’ of ten super-wealthy property developers who
received ‘secret loans’ finally came to public light although the regulator apparently
had known about them for some years. Construction, now the main source of Irish
growth, came to a virtual halt. Seventy-five thousand new houses per year were
2000 2001 2002 2003 2004 2005 2006 2007
Figure 4.3 Construction-based private debt drives the Irish debtcrisis
Source: Irish Central
, there was a
significant literature on transitions to democracy, with a
good deal of discussion of pacts and the general tactics of
The region as a whole also suffered from a severe economic setback, following the foreign debtcrisis of 1982.
Even today it has not fully recovered from the resulting
problems, with the result that the region’s record of strongly
positive growth during 1945–82 was followed by a much
more disappointing performance during 1982–2002. Discussions of political economy were inevitably dominated
during the 1980s by
crisis managers denied that there was any euro crisis at all. Rather, in the eyes of Merkel, Trichet, the head of the ECB and Jean-Claude Juncker, the head of Ecofin, the body of EU finance ministers, it was simply a debtcrisis in some eurozone countries. There was an adamant failure to recognise that without a common currency, Greece’s problems would have been unlikely to spill over into Spain and Italy. 14
An acknowledgement that the crisis was a systemic one that arose from a monetary experiment whose defects had been exacerbated by low-grade political oversight
€50 billion for the direct recapitalisation of
its banking sector, Greece could ensure sovereign debt would fall below 100%
of GDP by 2020. Beyond any doubt, debt would be then sustainable. Greece’s
return to the markets could be accelerated.
The European Commission indicated that such support was available only
to countries in which the crisis was as a result of shortcomings in the banking
sector, not to nations afflicted by a sovereign debtcrisis already in receipt of
major support from either fellow member states or the EFSF.23
The political posturing and
the crisis was going from bad to worse because of a fundamental
inability to agree collective action.
This is not a debtcrisis. This is a political crisis.… The leaders of the Eurozone
will soon face the choice between an unimaginable step forward to political
union, or an equally unimaginable step back.12
The major questions and painful decisions, such as any restructuring of Greek
debt, were just being perpetually postponed; one can only posit a lack of
political courage or the naïve belief that an imminent reversal in circumstances
would remove their necessity
Service and the Goethe Institute, add further value to what scholars famously called ‘soft power’. 79
Two recent developments – Germany’s role during the eurozone and migration crises – seem to have confirmed the country’s positive image abroad. Surveys conducted in eight EU countries and the US during the sovereign debtcrisis in Europe established that Germany is the most admired Member State in the EU. 80 Roughly eight in ten people in France (84 per cent), the Czech Republic (80 per cent) and Poland (78 per cent) hold a favourable view of Germany. Significantly
, 19(3): 295–307.
Petmesidou, M., and Mossialos, E. (2006). Social Policy Developments in Greece.
Rhodes, M. (2003). National ‘pacts’ and EU governance in social policy and the
labour market. In J. Zetlin and D. M. Trubek (eds), Governing Work and Welfare
in a New Economy: European and American Experiments. Oxford: Oxford
University Press, 129–57.
Royo, S. (2013). Portugal in the European Union: the limits of convergence. South
European Society and Politics, 18(2): 197–216.
Sacchi, S. (2013). Social policy reform in the Italian debtcrisis
state and structural funds together paint a picture of the EU in social policy until about 2010, when the Eurozone debtcrisis was an opportunity for a major increase in regulatory ambition over member states combined with a strong distrust of social expenditure entrenched in policy. Since 2010 the member states of the EU have opted to increase the breadth and ambition of its role in social policy through fiscal governance mechanisms – a great expansion of the EU’s fiscal regulatory state (Schelkle 2009 ; Greer and Jarman 2016a ). The Eurozone crisis, and the
leadership ’, Survival , 58 : 2 ( 2016 ), pp. 135 – 54 ; C. J. Schneider and B. L. Slantchev , ‘ The domestic politics of international cooperation: Germany and the European debtcrisis ’, International Organization , 72 : 1 ( 2017 ), pp. 1 – 31 .
24 R. Jervis , The Logic of Images in International Relations ( Princeton : Princeton University Press , 1970 ), p. 5 .
25 P. Hanks (ed.), Collins Dictionary of the English Language ( London : Collins , 1984 ), p. 731 .
26 G. Roberts , ‘ History, theory and the narrative turn in IR ’, Review
), which sets limits to public debt. The 19 member states in the Eurozone, including France and
Germany, have committed themselves permanently to limiting their budget
deficits to 3 per cent of gross domestic product (GDP) and their national debt
to 60 per cent of GDP. This ‘conservative straitjacket’ (Wall, 2014: 73) has been
particularly challenging for centre-left parties in government. The SPD and PS,
both of which were in office during the peak of the Greek debtcrisis, struggled to
formulate and implement a social democratic strategy at the European level. Yet,