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Implementing the second Memorandum

22 Austerity and growth: implementing the second Memorandum From the end of February 2012, both the European and the Greek focus was on satisfying the conditions specified on 21 February in the second Memorandum, to enable the release of the €130 billion and to avert a disorderly default. The first challenge was to complete discussions with the private sector regarding the ‘haircut’. On 24 February 2012, the Greek government invited all bondholders wishing to participate in the bond exchange to declare their intent by the evening of 8 March. The holders of bonds

in The European debt crisis

This book surveys ‘thrift’ through its moral, religious, ethical, political, spiritual and philosophical expressions, focusing in on key moments such as the early Puritans and postwar rationing, and key characters such as Benjamin Franklin, Samuel Smiles and Henry Thoreau. The relationships between thrift and frugality, mindfulness, sustainability and alternative consumption practices are explained, and connections made between myriad conceptions of thrift and contemporary concerns for how consumer cultures impact scarce resources, wealth distribution and the Anthropocene. Ultimately, the book returns the reader to an understanding of thrift as it was originally used – to ‘thrive’ – and attempts to re-cast thrift in more collective, economically egalitarian terms, reclaiming it as a genuinely resistant practice. Students, scholars and general readers across all disciplines and interest areas will find much of interest in this book, which provides a multi-disciplinary look at a highly topical concept.

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Making do, rationing and nostalgic austerity

69 5 Nationalist thrift: making do, rationing and nostalgic austerity ‘Make do and mend’: thrift in the name of democracy So far, this book has tackled the religious thrift of the Puritans with its Providentialist and later more pragmatic concerns, the strict moral thrift of the Victorians with its grounding in individualism and social righteousness, and the spiritual individualism and communal vision of Thoreau. This chapter will explore examples of thrift quintessentially different from those witnessed so far, due to their emphasis on social solidarity based

in A brief history of thrift

environment was more adverse than expected, euro-area policies were inconsistent, implementation by the Greek authorities was inadequate or insufficient, debt restructuring should have been front loaded, fiscal austerity has been excessive, and finally, not enough weight was given to the structural reform and competitiveness objectives.6 The report stressed that the impact of austerity was difficult to assess. Greece was already in recession when the programme was first implemented. However, ‘it was evidently hazardous to impose a 10 percent GDP shock to a leveraged and

in The European debt crisis
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may well bring the Spanish state to its knees…. Spain’s austerity–recession feedback loop is similar to the process that fed economic contraction in Greece.’7 Anxiety over future developments in Spain spread across the EU. The rate of interest available to Spain on the international bond markets exceeded 6.5%, rendering Spanish debt unsustainable. The New York Times reported: In a season of nightmare projections for Europe, this one could be the scariest: Greece leaves the euro currency union at the same time Spain’s banking system is collapsing.… if a Spanish

in The European debt crisis
Benjamin Franklin, Samuel Smiles and Victorian moralism

, this was a version of womanhood that was to prove incredibly pervasive, arguably making its way into current-​day rhetoric on household thrift under austerity, as this book will show. Charles Dickens too promoted thrift, presenting characters that came undone due to either their miserly, or their reckless, financial behaviour. Scrooge, of course, in A Christmas Carol, was typical of the former, as was the recognition of William Dorrit in Little Dorrit when he said ‘I am the only child of parents who weighed, measured, and priced everything; for whom what could not be

in A brief history of thrift

stringent policy of austerity: ‘The Europeans delayed in drawing up their programme, its concept was wrong, and the distribution of burdens it provided was unjust. The Europeans bear the responsibility for developments in Greece.’2 The Troika, of course, did not subscribe to the above analysis. Matthias Mors, the representative of the European Commission, stated in an interview he gave in October 2011: in general no mistakes were made in the original plan.… It is true that we underrated the depth of recession. To a certain extent, there were developments that surpassed

in The European debt crisis
The Greek case

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.

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from the Troika indicated indirectly that all preceding efforts to address the crisis had failed. Extensive debt restructuring would be needed if any conclusive progress were to be made. At the same time, however, it was no less relentless in its demands for the reduction of the deficit, so that a primary surplus might be achieved as early as 2013. No reference was made, and no analysis undertaken, with regard to the social costs of continued austerity. The severe fiscal targets placed huge pressure on the Greek government to rapidly force through cuts in social

in The European debt crisis
Seeking a new solution

shouldered by the taxpayer would inevitably lead to social unrest, a rise in poverty and increases in austerity. Creditors’ participation in restructuring of debt was therefore a logical conclusion. In order to avoid mutually damaging developments, a consensual arrangement, involving the private sector and the indebted nation, had to be sought.2 100 Greece.indb 100 3/13/2014 1:56:39 PM A year of the Memorandum: seeking a new solution 101 The reduction in the interest rate and an extension of the repayment sched­ ule did not alter the debt to GDP ratio, and a debt of the

in The European debt crisis