Greece's Entry into the Support Mechanism

Journal of European Public Policy, 2015

There are two features of the Greek crisis that need explanation: the lopsided outcome where Greece did not achieve any of its stated goals; and the protracted negotiations. I explain these two features as results of two factors: Nested Games (the Greek prime minister was also involved in a game inside his own party); and incomplete information (the Greek government did not understand the weight of unanimity to change the status quo in the EU, and did the best it could to create a unanimity, of all the other countries, against it). The lessons from the crisis are two-sided: for the Greek side not to lose any more time in the application of the agreements (say, with elections); for the EU side to consider different ways of forming and aggregating preferences: having elections (with a wide EU constituency as opposed to national ones), and making decisions (eliminating the unanimity requirement).

Panoeconomicus, 2010

This paper presents and critically discusses the origins and causes of the Greek fiscal crisis and its implications for the euro currency as well as the SEE economies. In the aftermath of the 2007-2009 financial crisis the enormous increase in sovereign debt has emerged as an important negative outcome, since public debt was dramatically increased in an effort by the US and the European governments to reduce the accumulated growth of private debt in the years preceding the recent financial turmoil. Although Greece is the country member of the eurozone that has been in the middle of this ongoing debt crisis, since November 2009 when it was made clear that its budget deficit and mainly its public debt were not sustainable, Greece's fiscal crisis is not directly linked to the 2007 US subprime mortgage loan market crisis. As a result of this negative downturn the Greek government happily accepted a rescue plan of 110 billion euros designed and financed by the European Union and the IMF. A lengthy austerity programme and a fiscal consolidation plan have been put forward and are to be implemented in the next three years.

This essay asked, “Why Greece accepted the EU’s track of bailing out its economy”. Straight from the beginning, it showed that the essay’s subject was an oversimplification and it would stand alone only in the framework of a focused academic analysis. The student, however, focused in Chapter 3 to answer the subject from a political economy perspective. He presented extensive official data to show the unsustainability of the Greek growth model that lead Greece to seek a ‘rescue plan’. As it was supported, the Greek European “rescue track” was not an option, it was the only option and Greece had no say. The latter was further embellished with geopolitical and geoeconomical reasons of why Greece was not an absolute decision-maker for its rescue. It was supported that a Greek default would cause uncontrollable spillovers to the EZ, to its EZ’s partners, to its citizens, to the (Western) Balkans, to Turkey and the Southeast periphery of Europe.

This paper offers a dialectical analysis of the law relating to the Greek crisis. The form and content of the measures introduced in the Greek legal system to deal with the debt crisis is examined under the concept of 'necessity'. It is argued that this concept, used by the Greek Council of State to justify the constitutionality of these measures, opens a path for a more comprehensive analysis of the measures implemented through the mechanism of the Greek Memoranda of Understanding. The measures are seen as 'necessary': on the one hand in their accordance and basis on principles of the European Union; on the other hand in their class orientation and reflecting of specific social (class) interests. But despite their necessity, neither their content, nor the form of implementation of these measures is fixed; it is rather contingent, i.e. dependent on the level of intensification of social (class and intra-class) and economic antagonisms.

Austrian Journal of Political Science (open access)

"English: What are the consequences of the radical measures taken in Greece since the beginning of the crisis? While discussing the positive and negative effects of the Troika therapy in Greece, this essay gives an overview of the political situation in Greece and Europe, and discusses the dangers for democracy in the EU. Deutsch: Welche Auswirkungen hatten die tiefgreifenden Maßnahmen, die seit Ausbruch der Krise in Griechenland eingeleitet wurden? In dem Essay werden die positiven und negativen Konsequenzen analysiert, und sodann wird diskutiert was der Fall von Griechenland über die aktuelle politische Situation Griechenlands und Europas aussagt – und welche Gefahren für die Demokratie damit verbunden sind."

In this research I utilise descriptive and analytical methods to investigate the European financial crisis in general, and the Greek financial crisis in particular. A wide variety of sources are used to interrogate the causes and effects of the Greek financial crisis. I show that the causes of the crisis were a combination of underlying real sector issues, coupled with immediately precipitating factors, whilst loss of control over monetary policy constitutes a propagating factor of the crisis. I show that crisis has had severe economic, political and social negativities. The anatomies, effects of the financial crises which afflicted other Eurozone members are also expounded upon. I discuss the current austerity-conditional bailouts which have been implemented across Greece and other affected countries. This research examines the underlying theoretical framework of the bailouts as well as the substantial criticisms which have been levelled against the theory and practice of the austerity-conditional bailouts. Furthermore, I explore the impact on Greece as well as the broader international impact of Greece potentially leaving the Eurozone. Finally, I draw lessons from the Eurozone crises as applicable to South Africa.

2017

The mainstream narrative of the Greek financial crisis blames Greece for being the architect of its own financial crisis. This narrative reduces the complexity and global nature of the Greek financial crisis to an internal and national focus that justifies a strategy of structural adjustment and austerity targeted to reduce the public debt. Yet, Greece's public debt has grown over the course of treatment. This paper contends that the strategy intended to resolve the Greek financial crisis is not a resolution strategy at all—it is more accurately conceptualized as a crisis management strategy, which is insufficient to reduce the public debt and instead fuels a deflationary spiral in Greece. The Troika, consisting of the European Commission, European Central Bank, and International Monetary Fund, alongside the Eurogroup, credit rating agencies, and private investors endorse a crisis management strategy that has engendered an unprecedented wave of discipline, surveillance, and control alongside a neoliberal restructuring of the Greek economy that has functioned to protect private interests. In effect, power is increasingly wielded by unelected international political and financial institutions, which not only temper the sovereignty Greece, but also undermine the functioning of democratic processes.