Vasillis Monastiriotis
16 April 2015 @ 14:00
- Past event
“The Greek euro-crisis: between government failure and failed government”
abstract
The presentation seeks to provide an analytical account of the Greek crisis that goes beyond simple and partial explanations of the crisis, which typically focus selectively either on domestic problems and weaknesses (fiscal laxity, corruption, weak administrative capacities, reform resistance) or on external and systemic factors (the ‘asymmetry’ of the Eurozone, the recipe of austerity, German ordo-liberalism, the EMU architecture). It frames the crisis as a unique combination of government (policy) failures at the European level and failed government (policies) at the domestic level of Greece. In doing that, it addresses three sets of issues: (a) the policy context and related policy misconceptions that shaped it; (b) the issue of policy design, in relation to the bailout agreement(s) and the ensuing conditionality; and (c) the issue of policy delivery and the domestic failures associated with it. In relation to the policy context and diagnosis of the crisis, it challenges three often-cited ‘causes’ of the crisis: the asymmetry of the Eurozone, the incompleteness of EMU, and the ills of the austerity recipe. Following, it identifies the case of government failure not with the above ‘architectural’ problems but with a series of policy beliefs underpinning the response to the crisis, particularly in relation to the primacy of markets, the role of rules and incentives, and the economics of adjustment to crisis. It then goes on to examine the case of failed government, identifying five systemic failures of the Greek response to the crisis and providing historical-institutional and political-economy explanations for it. The main implication and thesis of this analysis is that overcoming the crisis requires the overcoming of external and domestic blockages that are often overlooked as emphasis has been placed disproportionately on systemic design issues that, it is argued, are of secondary importance.