Capitalising on constraint

Bailout politics in Eurozone countries

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.

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