Crisis Politics in Europe: Vulnerability to Adjustment, Policy Responses and Political Conflict

The Euro crisis has turned into one of the most serious challenges that the European Union (EU) has had to face so far. At its root the crisis is a balance-of-payments crisis; caused by divergent economic developments among member states in the pre-crisis years and the deep financial integration that accompanied this process.

Economic Consequences from the Enforcement of Deflationary Policies in Greece and the Case of Greek Shipping

"La democracie c' est s’addresser a l’intelligence des citoyens plutot que d’exciter leur peurs."

Francois Hollande, October 2015

The underlying intention of this presentation has been to provide an answer to the apparent inconsistency between the declared objective of assisting the Greek economy go back to economic development and the means presently employed to achieve this. The ailing Greek economy has been obliged to undergo a severe austerity programme over a lengthy period at a time of world recession as a precondition for receiving economic facilitation to stay in the Eurozone and return to economic development.

Who is to Blame for Austerity and its Consequences in Greece?

By the end of the crisis, Greece will have lost about 27-30% of its economic output. This sort of disaster is usually seen only after wars and biblical events –but who is to blame in this case since God and the generals had presumably nothing to do with it? A popular cause is “austerity forced upon Greece by international institutions”. This is doubly flawed.

3rd Annual GPPF Chania Forum 2014: Executive Summary

Europe in Flux: 

Secessionism, Ideological Polarisation, 

and  the Emerging Institutional Design of the EU

26-27 September 2014

Kiani Beach Resort

Chania, Crete

Greece

Executive Summary of the 3rd Annual GPPF Chania Forum

The Greek Public Policy Forum organised its 3rd Annual GPPF Chania Forum, titled “Europe in Flux: Secessionism, Ideological Polarisation, and the Emerging Institutional Design of the EU”, on September 26 and 27 at the Κiani Beach Resort in Chania, Crete. The event took place thanks to the kind sponsorship of Decidendi Consultants, Europe Direct Region of Crete, and the solar systems company CALPAK S.A.. We also wish to thank the ELIAMEP Crisis Observatory, the Hellenic Alumni Association of the London School of Economic, and the Economic Chamber of Greece (Department of Western Crete) for their support.

The Past, Present and Future of the European Union

The edifice of the European Union (EU) has been built on the basis of equilibrium between intergovernmental co-operation and supranationalism. In other words, the fathers of Europe wanted to attain integration through the institution of organs which would be representative of the two currents: institutions with an intergovernmental character, through which the voice of the Member-States could be heard, and institutions with a supranational character, which would represent Europe, as a potentially integrated entity, with its own interests and expectations. In the first category, the central institution is the Council of Ministers, which functions with the presence of national Ministers, depending on the subject-matter of the agenda, while in the second category the main organs are the Commission and the European Parliament. The Courts, finally, settle disputes in a spirit of supranationalism, and in this direction they have offered their good offices to integration.

So What Now?

For two decades and more, the European Union has been trying to get ‘ownership’ for structural reform in Greece.

Spending has been savagely throttled back. But there is no click, no reset, no moment on the road to Damascus, where the Greek government and Greek society ‘gets’ the need to change.

1st Annual GPPF Forum 2012: Executive Summary

“Unfolding the Layers of the Crisis: the Nation-State, Europe, and the World”

1st Annual GPPF Chania Forum, 21-22 September 2012

Executive Summary

The third event organized by the Greek Public Policy Forum took place on September 21 and 22 at the Kiani Beach Resort in Chania, Greece. It was kindly sponsored by Decidendi Consultants, the Economic Chamber of Western Crete, and the Regional Development Fund of Crete. The Chania Forum tried to build upon the foundations laid by the two previous Fora at Oxford (June 2011) and Nottingham (March 2012). The Oxford Forum focused on Greece’s multifaceted crisis (economic, political, and social). The Nottingham Forum tried to examine the Greek crisis in its European context.

Chania Conclusions on the Crisis

The business of predicting the future course of the present eurozone financial crisis is a risky one, with developments occurring with a frequency and irregularity that leave one constantly uncertain what will happen next. However, sufficient time may have passed to venture a number of tentative predictions as to what the outcome of the crisis will be.

The Eurozone crisis and potential future scenarios

Neo-liberal restructuring in Europe has come up against its internal contradictions. It has reached its limits. Germany’s export strategy, based on cuts in wages and working conditions, cannot be replicated by everybody else. If one country has such a drastic surplus in trade, others must absorb these products. Even more severely, the Eurozone crisis has highlighted the unevenness of the European political economy. Super-profits reaped in core countries such as Germany were re-invested in state bonds of peripheral countries only in order to purchase yet more goods from the core. This circle could not go on forever and there is no potential solution from within neo-liberalism able to cope with this crisis (see Europe and the limits of neo-liberalism).

Αμαρτίες γονέων τέκνα παιδεύουσι: passing on debt overhang

For a pdf version of the paper, containing the relevant figures, please click here.

What follows is an outline of the Greek sovereign debt crisis from a perspective that is certainly not mainstream - at least not in the sense of what every major political, economic, and media outlet loves to hate nowadays. For my interpretation as to how the crisis came about will be neither structural nor cultural. Of course, national economies do grow or decline because of social and economic substructures, political institutions, and cultural traits. Yet, these refer to long-term processes whereas serious sovereign debt crises usually evolve over relatively short (often too short) periods of time. Sovereign bankruptcies, much like those of large private companies, occur because three unfortunately too human factors are allowed to carry the day in the highest echelons of strategic decision-making. These are irresponsible greed, incompetence, and irrationality (a term which many a time is meant more as an euphemism for stupidity).