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Costas Simitis

19 Conflicts at the highest European level Following the October 2011 summit, anxiety over instability in Greece continued to have ramifications across the EU. Italy was looking increasingly exposed to contagion from the crisis, and at risk of a similar exponential rise in borrowing costs. Even though Italy’s debt to GDP ratio was 120%, Rome had continued to access the markets at a rate of interest hovering around the 4% mark. However, 2011 saw a rise of two percentage points in this interest rate.1 Under these terms, its debt was no longer sustainable. Despite

in The European debt crisis
Costas Simitis

bonds. The interest rate was ‘only’ 6.37%, whereas forecasts in the international media had predicted that it would reach 7%. However, this still marked a significant increase on the previous interest rate, and did not allow the country any breathing space. It Greece.indb 38 3/13/2014 1:56:36 PM Ineffective solutions 39 indicated that continued borrowing on international markets was unsustainable. Discussions concerning the need for financial assistance to the country flared up again. The matter proved divisive as both Greece and Germany held conflicting opinions

in The European debt crisis
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.

Seeking a new solution
Costas Simitis

spread over the range of new charges. Continual marches in the centre of Athens, clashes between dissenting groups and the police, repeated strikes affecting public transport, and protests outside Parliament all disrupted life in the centre of Athens and gave the impression of permanent turmoil and relentless conflict with the government. Research undertaken looking at the social costs of austerity indicated that over 50% of the population had difficulty in covering their monthly outgoings, seven out of ten households felt that their financial position had deteriorated

in The European debt crisis
An obstacle race
Costas Simitis

insisted on the opposite and the conflict soon escalated to Brussels. At the beginning of December, the Minister of Labour travelled to Brussels and proposed that sectoral agreements could be overridden by company-specific ones only where a recognised trade union operated at the company level. Although no agreement was reached, it was decided that the two sides would return to this issue in due course. On 10 Greece.indb 84 3/13/2014 1:56:38 PM Implementing the Memorandum: an obstacle race 85 December it was announced the next instalment had been given the green light

in The European debt crisis
Costas Simitis

had overcome the crisis and once again politicians could draw partisan lines and speak in favour of their clientele. Its leader repeatedly drew ‘red lines’ in order to prevent cuts in the 172 Greece.indb 172 3/13/2014 1:56:44 PM The new agreement (the second Memorandum) and PSI 173 size of pensions or new burdens to taxpayers. However, after his objections were widely advertised he agreed to proceed with the changes in the context of the new programme. The ongoing party positioning and partisan conflict fuelled intense discussions over whether and when elections

in The European debt crisis
Mark Harvey

directly enters. Indeed, for Weber economic competition is a form of ‘peaceful conflict’, whereby attempts are made to ‘gain control over opportunities and advantages which are also desired by others’ and which take place ‘in exchange relationships, bound . . . by the order governing the market’ (Weber, 1968, p. 38). Although not clearly stated, Weber clearly intends that competition here involves winners and losers, and thereby a process of ‘social selection’ (1968, pp. 38–40). In this view of competition as a pacific power struggle, however, it appears that the power

in Market relations and the competitive process
Costas Simitis

elections that would inevitably favour the opposition. Political positioning and partisan conflict continued in spite of the realisation there was not the slightest room for their usual little games. Citizens drew the conclusion that despite the patriotic veneer under which it was hiding its pursuits, the political system was incapable of rising to the occasion.12 On 10 November 2011 Lucas Papademos, formerly Governor of the Bank of Greece when the country entered the EMU, and Vice President of the ECB for many years, was selected to be the new Prime Minister. He was the

in The European debt crisis
Oonagh McDonald

for every aspect of the development and the actual benchmark each day, as well as credible and transparent oversight and governance, including the establishment of an oversight body responsible for the integrity of the benchmark. There should be clear written arrangements for each person’s roles and obligations in setting the benchmark, especially for any third parties involved. There should also be procedures in place for the document­ ation, implementation and procedures for identifying, disclosing, managing and avoiding conflicts of interest. There should be a

in Holding bankers to account
Oonagh McDonald

difference to me. Broker 2: Alright, cool. Rabobank’s one month JPY LIBOR submission was 0.63 that day.5 On 18 March 2011, Rabobank attested to the FCA that its arrangements for its LIBOR submissions were adequate and fit for purpose, when it had not yet formally implemented its policy nor disseminated Yet more banks are involved79 it to its employees or trained them on it. The bank had failed to deal with the inherent conflict that exists when a panel bank allows its submitters to trade interest rate derivatives products linked to the very LIBORs for which they were

in Holding bankers to account