Papers by Marica Frangakis
Journal of Contemporary European Studies, 2014
"This book examines the present crisis of Greece’s political economy as a crisis... more "This book examines the present crisis of Greece’s political economy as a crisis of stateness, tackling the domestic as well as the international dimensions. It represents the first attempt by Greek academics to put forward a theoretically-informed, interdisciplinary analysis of Greece’s fiscal, economic, and political crisis. The approach aims to fill a major gap, combining insights from comparative politics, political economy, international relations theory, and legal-institutional analysis, in a theoretically informed account of the Greek case in comparative and theoretical perspective. The book tackles the issue of the possible next steps for the EU under the influence of the crisis of the eurozone, including a thorough analysis of national sovereignty seen from a domestic and an international point of view, focusing on critical processes in the international arena such as interdependency and dependency, while a legal-institutional chapter demonstrates the erratic way in which Greek government dealt with sovereign debt. The project comes at the right time in order to address a highly contentious chapter in the political development of the Greek state and of the European South. As the crisis in the eurozone’s weaker periphery unfolds, Lavdas, Litsas, and Skiadas use the Greek crisis in order to address a much larger and critical issue: the role and predicament of stateness in the developing EU."
The pursuit of a single, financial market in the EU dates from the 1980s and the institution of t... more The pursuit of a single, financial market in the EU dates from the 1980s and the institution of the Single Market project. At that time, a number of directives were adopted, relating especially to the banking sector. The main obstacle to the integration of the EU financial services sector was however the lack of a single currency, which was not introduced until the early 2000s. In 1999 the Euro was officially introduced initially across 11 member states, soon spreading to encompass 16 out of the 27 member states of the EU today. As the single currency project approached realisation, the issue of financial integration came to the forefront of economic policy considerations. An ambitious plan, the Financial Services Action Plan, was agreed upon, aiming at establishing the legal and policy framework for the deepening of financial integration across the EU over a relatively short period of time, namely 1999-2005. The completion of the Plan on time was indeed an achievement from the poin...
Τα αίτια που οδήγησαν στην τέταρτη ανακεφαλαιοποίηση είναι ιδιαίτερα σύνθετα. Ανάγονται (α) στις ... more Τα αίτια που οδήγησαν στην τέταρτη ανακεφαλαιοποίηση είναι ιδιαίτερα σύνθετα. Ανάγονται (α) στις παραλείψεις και στρεβλώσεις των προηγούμενων ανακεφαλ/σεων, (β) στην κακιά κατάσταση των τραπεζών, (γ) στη στάση της ΕΚΤ, που οδήγησε στην ακριβή χρηματοδότησή τους μέσω του Μηχανισμού Εκτακτης Ρευστότητας (ELA), (δ) στην αβεβαιότητα που δημιούργησε η μακρά περίοδος διαπραγματεύσεων και που είχε ως αποτέλεσμα τόσο την εκροή καταθέσεων, όσο και την αύξηση των μη εξυπηρετούμενων δανείων.
The Greek economy remains in the clutch of a crushing public debt; negotiations on debt relief ... more The Greek economy remains in the clutch of a crushing public debt; negotiations on debt relief are expected to take place in 2016 - The ECB can play an important role in getting the Greek economy out of the debt-deflation deadlock
SYRIZA’s rise to power - first left wing government in Greece & in Europe - is troubling for the ... more SYRIZA’s rise to power - first left wing government in Greece & in Europe - is troubling for the EU establishment; Syriza is also a troublemaker, challenging presumed-to-be-stable categories (Gourgouris, 2015).
This is a presentation made in the Italian Parliament on 16/9/2015. The meeting was organised by Sbilanciamoci!
Overview of the Greek experience of eurozone membership, starting from the elements of capitalist... more Overview of the Greek experience of eurozone membership, starting from the elements of capitalist formation and taking it to the present time of austerity and intransigence of the EU leaders.
Review of Keynesian Economics, Vol. 3 No. 3, pp. 295–313, Jul 10, 2015
Greece is the country in which the eurozone’s public debt crisis began in late 2009. The policy r... more Greece is the country in which the eurozone’s public debt crisis began in late 2009. The policy response of the EU elites was to provide financial assistance on condition that a strict austerity-cum-deregulation policy is applied under the watchful guidance of the European Commission, the European Central Bank and the IMF (the so-called Troika). Five years later, the country is in an economic, social and political limbo, as a debt deflation process has set in. Greece, however, is not a special case. Rather, it illustrates the failures of the prevailing economic and political orthodoxy in the EU. At best, it can
serve as an example of the cost of ignoring the lessons of the 1930s Great Depression
«IL SENTIMENTO che domina
non è la paura, ma una razionale
incertezza sul futuro». Marica
Frangak... more «IL SENTIMENTO che domina
non è la paura, ma una razionale
incertezza sul futuro». Marica
Frangakis (nella foto) fino a due
anni fa era nell’ufficio studi Nicos
Poulantzas della Banca centrale
greca. Poi è confluita nelle schiere
di Syriza.
As notions of crisis management, such as the fiscal multiplier applied by the IMF or the Reinhart... more As notions of crisis management, such as the fiscal multiplier applied by the IMF or the Reinhart and Rogoff 90% of GDP debt threshold, became questionable and, on occasion, discredited, a new policy tool was needed. One that sounds reasonable, smart and adaptable. The ‘structural deficit’ meets these requirements. It is at the heart of the Fiscal Compact, formally known as the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, which was signed in March 2012 by all member states of the EU, except for the Czech Republic, the UK and Croatia (subsequently acceding the EU in July 2013) and ratified by all 25 signatories as of 1 April 2014.
This Conference is especially topical because renewed efforts are being made by the EU elites to ... more This Conference is especially topical because renewed efforts are being made by the EU elites to revive the Constitutional Treaty (CT) proposed in 2004, which was resoundingly rejected by two referenda - out of a total of three.
What has been happening in Greece since the outbreak of the financial crisis in 2007/2008 and of ... more What has been happening in Greece since the outbreak of the financial crisis in 2007/2008 and of the eurocrisis in 2009/2010 is not unique to this country. Greece is not an exceptional case. The Greek crisis displays many characteristics shared by other member-states, albeit in extremes. It is the extreme shape and dynamics of the Greek case that have acted as a catalyst for change in its domestic social and political landscape with the rise of the non-traditional, radical left. However, for such a change to influence the course of events there needs to be a broader change in European affairs.
Die griechische Linke wird die nächsten Wahlen aller Voraussicht nach gewinnen. Ihre Regierung wä... more Die griechische Linke wird die nächsten Wahlen aller Voraussicht nach gewinnen. Ihre Regierung wäre die erste der EU, die sich offen gegen den bisherige Krisenkurs von Austeritätspolitik und Bankenrettungen stellt. Damit könnte sie einen Wandel der europäischen Politik insgesamt einleiten – sofern es ihr gelingt, Unterstützung in Europa und außerhalb der politischen Linken zu gewinnen
Eight areas of discussion, comprising the following: Causes of the crisis in Greece; Troika meas... more Eight areas of discussion, comprising the following: Causes of the crisis in Greece; Troika measures; implications; who is being 'rescued'; the role of propaganda; 'success story' and other such tales; resistance; can the EU survive as a „democracy conforming to market requirements“?
Overall, we shall be arguing that the present ills of the European economy are largely
endemic i... more Overall, we shall be arguing that the present ills of the European economy are largely
endemic in the paradigm on which current economic and social policy is based. However,
the governing European elites appear determined to carry on with this paradigm even when
it is evidently failing to fulfi l its objectives. To the extent that this is the case, the new elements
introduced by the Integrated Guidelines are not likely to signify a shift in policy
even though they may mitigate certain aspects of it.
Klassen/Sozialstruktur "Inequality and Financialisation: The Case of the EU" Study by Marica Frangakis, Apr 29, 2014
Inequality in the distribution of income and wealth feeds the process of financialisation and is ... more Inequality in the distribution of income and wealth feeds the process of financialisation and is fed by it. It is a two-way relationship, which has favoured the meteoric rise of the economic, social, and political power of finance in the past thirty years. This rise has been marked by financial crises of varying intensity in different localities. The financial crisis which erupted in late 2007, however, has been both deeper and more widespread across the developed financial systems of the world than in the past, aggravating the distributional inequalities that are inherent in the process of financialisation.
In the EU, the era of financialisation is associated with the introduction of the Single Market in the mid- 1980s and of the single currency in the 1990s, as well as the pursuit of financial integration from the late 1990s onwards at the expense of financial stability and consumer protection. As in other parts of the advanced capitalist world, the 2007/2008 financial crisis was succeeded by an economic crisis in the EU as well. Five years later, it is still unfolding. Certain areas are converging towards low growth, while others are deep in recession. The distributional implications of these trends are especially important. In this paper, we discuss the connections between inequality and financialisation in the EU.
LUXEMBURG Gesellschaftsanalyse und linke praxis, Jul 17, 2013
In the aftermath of the Great Depression, Keynes argued that for an economy to avoid a fully blow... more In the aftermath of the Great Depression, Keynes argued that for an economy to avoid a fully blown recession, government policy needs to become proactive, i.e. to make up for the reduced spending of the private sector (businesses and households) by increasing its own expenditure. This lesson of history was ignored both by the architects of the European Monetary Union and by the EU leaders in dealing with the current crisis. Thus, the latest banking crisis soon became a ‘public debt’ crisis. That is, the emphasis was shifted ideologically and politically from the financial sector and the deeper issues of casino capitalism to the public budget and debt.
The inherent theoretical fallacy of this view is implicit both in the austerity programs implemented in Greece and in other indebted countries of the Eurozone and in the restructuring of the economic governance of the single currency over the past two years
LUXEMBURG GESELLSCHAFTSANALYSE UND LINKE PRAXIS, Jul 12, 2013
Eis pois a questão que levanto aqui e agora, uma vez que Portugal se recusa viver em autarcia com... more Eis pois a questão que levanto aqui e agora, uma vez que Portugal se recusa viver em autarcia como um país pequeno que é, uma vez que a saída da zona euro unilateral é também ela inaceitável, uma vez que a saída apoiada pela UE é , por seu lado, impraticável, e tendo ainda em conta o conjunto, caracterizado pela ignorância, ganância e maldade, destes que nos governam, seja a nível regional seja a nível nacional, então o que fazer para não se morrer, mesmo que lentamente (!) com estas
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Papers by Marica Frangakis
This is a presentation made in the Italian Parliament on 16/9/2015. The meeting was organised by Sbilanciamoci!
serve as an example of the cost of ignoring the lessons of the 1930s Great Depression
non è la paura, ma una razionale
incertezza sul futuro». Marica
Frangakis (nella foto) fino a due
anni fa era nell’ufficio studi Nicos
Poulantzas della Banca centrale
greca. Poi è confluita nelle schiere
di Syriza.
endemic in the paradigm on which current economic and social policy is based. However,
the governing European elites appear determined to carry on with this paradigm even when
it is evidently failing to fulfi l its objectives. To the extent that this is the case, the new elements
introduced by the Integrated Guidelines are not likely to signify a shift in policy
even though they may mitigate certain aspects of it.
In the EU, the era of financialisation is associated with the introduction of the Single Market in the mid- 1980s and of the single currency in the 1990s, as well as the pursuit of financial integration from the late 1990s onwards at the expense of financial stability and consumer protection. As in other parts of the advanced capitalist world, the 2007/2008 financial crisis was succeeded by an economic crisis in the EU as well. Five years later, it is still unfolding. Certain areas are converging towards low growth, while others are deep in recession. The distributional implications of these trends are especially important. In this paper, we discuss the connections between inequality and financialisation in the EU.
The inherent theoretical fallacy of this view is implicit both in the austerity programs implemented in Greece and in other indebted countries of the Eurozone and in the restructuring of the economic governance of the single currency over the past two years
This is a presentation made in the Italian Parliament on 16/9/2015. The meeting was organised by Sbilanciamoci!
serve as an example of the cost of ignoring the lessons of the 1930s Great Depression
non è la paura, ma una razionale
incertezza sul futuro». Marica
Frangakis (nella foto) fino a due
anni fa era nell’ufficio studi Nicos
Poulantzas della Banca centrale
greca. Poi è confluita nelle schiere
di Syriza.
endemic in the paradigm on which current economic and social policy is based. However,
the governing European elites appear determined to carry on with this paradigm even when
it is evidently failing to fulfi l its objectives. To the extent that this is the case, the new elements
introduced by the Integrated Guidelines are not likely to signify a shift in policy
even though they may mitigate certain aspects of it.
In the EU, the era of financialisation is associated with the introduction of the Single Market in the mid- 1980s and of the single currency in the 1990s, as well as the pursuit of financial integration from the late 1990s onwards at the expense of financial stability and consumer protection. As in other parts of the advanced capitalist world, the 2007/2008 financial crisis was succeeded by an economic crisis in the EU as well. Five years later, it is still unfolding. Certain areas are converging towards low growth, while others are deep in recession. The distributional implications of these trends are especially important. In this paper, we discuss the connections between inequality and financialisation in the EU.
The inherent theoretical fallacy of this view is implicit both in the austerity programs implemented in Greece and in other indebted countries of the Eurozone and in the restructuring of the economic governance of the single currency over the past two years
EU financial integration policy caters mainly for efficiency. The few safeguards for stability and for consumer protection are insufficient and there is no perspective for workers protection against consequences of capital market driven mergers and acquisitions. These are the aspects on which a progressive financial market policy should concentrate most. In particular, the creation of an integrated European financial market should be embedded in a social and economic environment in which financial stability, economic efficiency and social inclusion are the guiding principles. To ensure financial stability the mission of the ESCB must be broadened, the Basle 2 framework should be changed, special measures against excessive financial speculation should be taken and tight cooperation amongst financial supervisors in the EU are necessary. Economic efficiency in financial markets can be enhanced when distortions caused by different tax systems and tax competition are removed and special financial instruments for the implementation of public development objectives are retained. In the area of social inclusion proposals for the guarantee of universal access to the financial system, for high minimum standards of consumer protection and for the inclusion of workers’ interests into the framework of a European financial market are formulated.
"
Since the 1980s, the financial systems of the member states of the EU have come under increasing competitive pressure, as a result of developments both on the global and on the European level. On the global level, the collapse of the Bretton Woods agreement and of the system of fixed exchange rates, followed by the two oil crises in the 1970s, marks the end of the era during which governments stabilized their economies by fiscal and monetary policies and public sector activity, with limited or occasional interference from the financial markets .
"The liberalization of financial markets that followed the collapse of the Bretton Woods Agreement soon spread within and across national borders. Industrial countries typically began partial liberalizations in the mid-1970s, pushing such reforms considerably further in the 1980s, so that by the early 1990s financial liberalization was virtually complete. According to Padoa-Schioppa and Saccomanni’s (1994) phrase, for all intents and purposes the shift from a government-led to a market-led international financial system had been accomplished.
As a result, striking changes have been taking place in relation to both the intermediation processes and the institutional design across time and space of the financial services sector."
Brief historical background
The state of the Greek economy prior to the crisis
Come the crisis – the role of finance; fear of contagion
The bail-outs save finance
The troika prescription
Social, economic, political implications
The bras de fer of the negotiations: the suspicion of Germany is back
The role of the ECB: guardian of stability or thuggery?
The new programme: financing envelope & conditions
Debt sustainability: the need for debt restructuring
About the deal - Quoting Tsipras
Future prospects – Greece deserves better, as do Germany & Europe
First to speak was Geert Reuten, economist at UvA and Senator for the leftist party SP (slides Geert Reuten). Geert was also one of the more than 70 economists behind a manifesto against the introduction of the Euro in 1997 (see the international version here). In that declaration they warned against exactly the effects that we see now. Geert Reuten started by focusing on the current political events at the EU. Things are moving very fast there. The process goes into the formation of a Banking Union, where democratic procedures are a mere footnote. Typical is also the latest report Van Rompuy issued, with the remarkable title "Towards a genuine Economic and Monetary Union", leaving us with the notion that up till now we have been living in a not genuine union...The EU is falling apart now in those in favor of the EMU and the rest, and this also raises questions about the future of the European Parliament.
In a short retrospective on the manifesto of 1997, Geert pointed out the main points raised. One of the main issues the economists explained was that this would benefit the economies inside the Eurozone with a (trade)surplus, and that is exactly what happened, and part of what caused the situation that countries like Greece and Spain and Portugal are in today. They knew beforehand that since individual countries wouldn't be able to compete with national currencies, they would be forced to compete on other costs (mainly being: labor, environment and taxation).
Geert described a division of Europe into 'Greater Germany' (with countries like Finland, Netherlands...) and 'Greater Greece', and the latter are the ones that miss out. The Netherlands for instance still gains two billion (twee miljard) a year form Greece. Graphs on slide show the division, that did not diminish in the 15 years the Euro exists. As a solution Geert comes with two practical measures: increase wages in 'Greater Germany', and erect a National Payment Bank in each EU member state.
Second to speak was Marica Frangakis, she is an economist and works for the Nikos Poulantzas Foundation and is member of Attac and the Euromemorandum group. She came all the way from Greece especially for this event (thanks to TNI). Her most recent book that she co-authored deals with the policy of privatization in the EU and the very negative effects that this has mostly had.
Frangakis also sketched the beginning of the European Monetary adventure ("a very sad story") comprising now economies that have a 12 point difference in gdp-growth figures and often little political similarity. Frangakis points at a second manifesto that was also issued in 1997, by the Euromemorandum group and where they warn against the great risks for "welfare, justice, and the European Union". The austerity and structural reforms that the EU now promotes, are dogma's without any positive effect as perspective. They create incredible damage to the Greek society, as is illustrated with some mind-blowing statistics
With Geert, and later Dimitris, Marica point at the role that financial deregulation has played in creating this crisis, as it enlarged the imbalance between core and non-core EU-countries. Frangakis ends with a list of measures that should be taken, reinstating public services, stopping austerity en reforming the ECB. She also mentioned the validity of a Debt Audit Campaign, (an emerging issue that we will focus on later in our RWE program series).
Third and last speaker was Dimitris Pavlopoulos, economist at VU and also member of the Real World Economics group. In his introduction he debunked the mainstream myths about the causes of the crisis in Greece (such as the lies that gets repeated in newspapers like De Telegraaf that Greek people are lazy, don't pay taxes etc). The real reasons are the way the EMU has been developed, and also the labor market policies. Again. all three speakers pointed this out, what happened in the past 15 years is that countries in the south (of the EU) massively imported financial capital from the north. People in the south were promised financial stability and prosperity, but what they got instead was instability and misery. Also telling was the graph that Dimitris showed how taxation changed: individuals pay twice the amount they payed in 2001, while corporations saw their share halved. (Slides Dimitris Pavlopoulos)
As solutions Dimitris comes with the provocative suggestion to leave the Euro (first Greece, but probably that would cause such a commotion that more countries would start dumping the project). And all three agreed that a debt write off and regaining control over the financial sector are pressing measures to take.
After the introduction three rounds of questions and answers followed. Mostly about details of the introductions, but also more political debate, such as on the perspective of a Grexit, and the consequences thereof. All kind of solutions passed along, including the Montenengro strategy (keep the money but kick out the ECB). We did not have time to go into the next step in this debate: what should social movements do? We will organize a follow up on this subject later in the program. Marica Frangakis ended with a quite worrying prediction that Greeces default might start pretty soon and would have quite far reaching consequences. The present government might not be in power much longer, as there is no way they will survive the proposal of more austerity measures. That would mean new elections, which Syriza will most probably win, and they might decide to (or be forced to) step out of the Euro. This on its turn could cause an unprecedented domino effect, bringing the whole EMU-project in jeopardy. This could already start happening in a few months time..
This paper is organized as follows:
Section 1 reviews the current state of trade and monetary relations between the EU and China;
Section 2 discusses the austerity policies currently being pursued in the EU, with special reference to the Eurozone; issues regarding the rationale, institutionalization and impact of these policies are examined;
Section 3 draws out the implications of continued austerity in the EU for China, in terms of both trade and monetary relations.
This is especially so in the case of the European Union, where ‘austerity’ is nothing short of a dogma for the ruling elites. So far, austerity policy in Europe has produced economic destruction, human suffering, the forced rebalancing of social groups, whereby the ‘haves’ are being sharply set apart from the ‘havenots’. These phenomena are especially evident in the countries of S. Europe and even more so, in those that have been singled out by the financial markets as the weak links in the Eurozone.
Under these conditions, what to do, is a pressing question. There is no unique answer to such a question. However, some basic elements of policy may be outlined.
Halt the process of impoverishment of society and alleviate poverty;
Reverse the process of austerity;
Establish socially and environmentally sustainable growth;
Reconstitute the basic elements of a social provisioning state, including education and healthcare;
Refound the European Union, starting with the Eurozone.
The above guidelines start from an immediate perspective and the most pressing needs, advancing to a long-term goal.
A requirement for such an agenda to take off the ground is the building of social and political alliances within and across EU member states, the ultimate aim being to mobilize public opinion and to convince it of the futility and even dangers of the present path.
This is an especially difficult task in view of the fragmentation of the left, the decline of the trade union movement and the still weak social movements. However, such a route needs to be pursued with great urgency, in view of the rise of the extreme right (fascist in some cases), which finds fertile ground in the dismantling of society and of the social provisioning state.
How did we get there?
What is keeping us there?
With what implications?
What can be done about it?
The EU response
Thoughts on alternatives
The shortcomings of the single currency regime and the inequities of the EU’s crisis response have been much discussed. The new, SYRIZA-led government provides the political link intermediating between the public discourse and the decision-making process.
only living through it, but also taking a clear political and ideological stand.
Christos LASKOS & Euclid TSAKALOTOS
proposte radicali di Syriza
«Ευημερία χωρίς ανάπτυξη, προτάσεις για έναν άλλο κόσμο από κοινού», Ε.Μ.Π., Σχολή Αρχιτεκτόνων, Αίθουσα Γκίνη, 20-22 Φεβρουαρίου 2015.
Ελλάδα από την ύφεση και την κρίση, που την μαστίζουν τα τελευταία χρόνια; Αυτά είναι μερικά από τα κρίσιμα ερωτήματα που πραγματεύεται το παρόν κείμενο, το οποίο διαιρείται σε τρεις ενότητες (α) σύντομη ιστορική αναδρομή, (β) τρέχουσες οικονομικές εξελίξεις και (γ) σκέψεις για διέξοδο. Η συμβολή μας εντάσσεται στην προσπάθεια αναζήτησης συγκλίσεων μεταξύ των διαφόρων απόψεων, που διατυπώνονται στον ευρύτερο χώρο της αριστεράς.
Στο παρόν κείμενο, θα παρουσιάσουμε τις συνθήκες κάτω από τις οποίες πραγματοποιήθηκε η Συνδιάσκεψη του Λονδίνου, τους όρους αναδιάρθρωσης και διαγραφής του χρέους της Γερμανίας και τα διδάγματα που προκύπτουν από το ιστορικό αυτό προηγούμενο και που η Γερμανία επιλέγει να αγνοεί.