The Greek Crisis and the Crisis in Eurozone's Governance (original) (raw)

Managing crisis in the eurozone

Euro crisis displayed its full blow in the spring of 2010. Its dynamics revealed deep-seated structural flaws at the core of the EMU. The productive Germany is tied via the euro currency union to countries that have lower productivity rates and inefficient economies. This union has been beneficial to the countries of Southern Europe so far since EMU inception, as it provided them with cheap credit. EMU showcased its problematic institutional design. Compared to mature federations, the institutional design of EMU is incomplete. On the one hand, there is a strong ECB that decides monetary policies for the entire euro area. At the same time, there is a lack of macroeconomic policy coordination for the same area. The budgetary and fiscal policies are set by governments of national states. This is of great concern for the vitality and robustness of the EMU in the context of soft constraints imposed by the Stability and Growth Pact. In the first part, this paper will highlight basic structural problems that led to the current crisis of confidence in the common European currency. The second part intends to discuss the lack of monetary and fiscal policy coordination, while the third part analyzes monetary and fiscal responses to the crisis by the EU institutions and national actors. The fourth part seeks to portray some possibilities for overcoming deep-seated structural imbalances, and questions the likelihood of “gouvernement économique” as a new stage in European integration.

The European Union, its Economic and Monetary Union, and the (Apparent) Perception of Crisis Reflected in Immediate Regulatory Actions

Polish Review of International and European Law, 2020

While neither its institutional, nor legal arrangements fundamentally contributed to the emergence of the Eurozone crisis in the late 10’s of the 21st Century, the crisis exposed significant weaknesses of the EU economic governance, especially its inability to achieve a sustainable level of budgetary discipline. The crisis in particular highlighted the existing divisions of the EU Member States into different integration groups having divergent interests. Notably, it sharpened the division between the Eurozone states and non-Eurozone ones, as well as between the creditor-countries and debtor-countries. The EMU reform agenda adopted after 2008 gave more weighting to the interests of the former states. The emerging post-2008 economic governance-reform arrangements also gave more weight to the ECOFIN Council, at an expense of the European Commission. In the resulting institutional setting, the main aim of the EMU reform agenda was to assure the stability of the Eurozone and to reinforc...

Overcoming the crisis in the Economic and Monetary Union

Przegląd Europejski 1/2016, 2016

The purpose of the article is to assess the extent to which it has been possible to overcome the crisis situation in the economic and political/systemic dimension in Europe. The events of the crisis in the Eurozone mobilised the national and European elites to respond above all with respect to the economic situation. But in part, the changes concerned also the political dimension or precipitated consequences of a systemic character (related to the mechanisms of European integration). Some ideas were only discussed and did not gain practical implementation due to differing opinions and interests among the leading political actors, above all the EU member states. As a result, the crisis was overcome to a partial or incomplete extent both in the economic and political respect.

Euro-zone crisis: Past trends, current developments and perspectives

2014

After its launching in 1999 and rather successful decade-long performance, the euro-zone entered in 2010 into its first and extremely profound crisis. The crisis has been dragging on for almost four years and there isstill a lot of work to be done in order to reach a comprehensive and sustainable solution. The main objective of the article is threefold. Firstly, to present the main design failures of the original institutional structure of the euro-zone and its economic governance, secondly, to analyze the process of the euro-zone crisis management from its ad-hoc approach in 2010 to a more systematic approach applied over the recent 3 years, and thirdly, to discuss the key elements for a sustainable resolution of the euro-zone crisis. Looking in a more medium-term perspective, the solution of the euro-zone crisis is associated with an appropriate switch of the policy mix it applies. On the long-run, the resolution of the euro-zone crisis depends on the stabilisation of the public f...

Crisis in the eurozone: causes, dilemmas and solutions

This book discusses how the global financial crisis induced the ‘Great Recession’ and triggered problems within the eurozone regarding sovereign debt. The authors argue that the failure of the eurozone to meet any convergence criteria, together with unjustified emphasis placed upon unproven rules and institutions derived from contemporary neoliberal macroeconomic thinking, was an accident waiting to happen. Additionally, a series of potential remedies is proposed, ranging from a critical evaluation of solutions that the EU has already instigated (moral suasion and financial relief measures) together with a series of alternative propositions (fiscal federalism and a ‘European Clearing Union’). Moreover, the analysis is extended to the collapse of the eurozone and to options for national economic self-governance.

Controversial Policies of International Organizations towards Member States of the Euro zone in Economic Crisis

International organizations within the scope of their responsibilities have developed actions and policies on how to cope with the crisis of the EU member States through fiscal overruns of the Stability and Growth Pact as well as with the economic problems. Mainly I am referring to the Organization for Economic Co-operation and Development (OECD), the European Council, the European Union (EU), the International Labour Organisation (ILO) and the International Monetary Fund (IMF). There are two questions examined in this presentation: Firstly, whether the policies of these international organizations are compatible. Secondly, if the policy of each international organization, as expressed by its individual bodies, is coherent. This paper, without being exhaustive regarding this topic, focuses on three points: • On the economic policy which is expected to enable the EU Member States undergoing financial crisis to get out of this crisis, in which policy, as detailed below, substantive differences can be observed. • On the policy for safeguarding social cohesion in the above countries. Substantial differences are observed between ILO and OECD, which EU attempts to minimize. • On the evaluations of the European Court of Human Rights (ECtHR) and the European Committee of Social Rights of the Council of Europe regarding the results of the measures taken for Greece. Similar differences are observed between the EU institutions but are not examined in this paper due to lack of time.

The Effects of Global Crisis into Euro Region: A Case Study of Greek Crisis

ejeps.fatih.edu.tr

With the parallel to the negative effect of the global crisis on the world economy, the economies in the EU started to give negative signals. The member countries such as Greece, Ireland, Portugal and Spain seeing the first negative effects of the global crisis are located in the periphery of the continent. Among these countries, Greece is more important with respect to the depth of its ongoing crisis, its observed effects and being an initial example. This is the biggest financial crisis since the EU accepted the euro as a single currency and Greece involved in the Euro Region in 2001. Like some of the other member countries in EU, Greece has a huge amount of sovereign debts and budget deficit. The most sovereign debts in Greece were taken from financial institutions located in central countries such as Germany, France and Belgium. It is possible that the problems caused by the Greek non-performance issue could spread over Euro Region and that risk could affect directly currency union at first, then economic and political structure of the EU and create some problems for maintaining of its single currency, namely the euro and also the ECB. Called recently as a "naughty boy" or a "sick man" in the EU, Greece has created an important test 1 Corresponding Author, boraselcuk@khas.edu.tr 2 İşbank, naciyilmaz@yahoo.com -4 (2), 2011 50 Bora Selçuk and Naci Yılmaz atmosphere with regard to the integration and control of EU countries' monetary and economic policies and the creation of common policies against global crisis. It became a laboratory country for the Union. Taking into consideration the process, the ongoing problems in the EU currency system after global crisis will be debated around the notion of "Greek Crisis" in our work.