European Sovereign Debt Crisis

La crisi finanziaria scoppiata nell’autunno 2008 ha sancito il successo di coloro che ne sono stati gli artefici. In Italia e Grecia sono andati al potere tecnocrati e banchieri, gli stessi che, fino al giorno prima, hanno lavorato per le istituzioni responsabili del crollo dell’economia. Ai vertici dei governi europei, delle istituzioni internazionali, dell’Unione europea (un «super Leviatano»), siedono i referenti delle banche e della finanza, nelle mani dei quali una classe politica incapace e inadeguata ha affidato le speranze di ripresa. Essi continuano a perseguire le politiche di impoverimento di 720 milioni di europei, con l’unico scòpo di trasformare il Vecchio Continente in un immenso lager di schiavi moderni: tagli, flessibilità, liberalizzazioni, privatizzazioni, queste le «ricette» per raggiungere falsi obiettivi: la riduzione del deficit ed il pareggio di bilancio (tecnicamente impossibile). Con la «privatizzazione» (svendita) delle ultime società pubbliche completeranno il disegno, raggiungendo l’obiettivo di distruzione degli Stati e della privazione dei più elementari diritti di cittadinanza. Sono politici, banchieri, economisti, editori, controllano i media, e attraverso essi ci tranquillizzano. Non possiamo illuderci che, coloro che hanno appiccato l’incendio, si trasformino improvvisamente in pompieri. Guardando i dati, viene spontaneo domandarsi come sia possibile che in soli tre anni dall’autunno 2008, il debito pubblico di alcuni Stati (Italia, Spagna, Portogallo, Irlanda) sia sensibilmente peggiorato. La risposta è semplice: la colpa è delle misure anti-crisi legate alle operazioni di sostegno al sistema bancario. Con i soldi dati alle banche a interessi irrisori (1.200 miliardi in Europa, e altrettanti negli Usa), queste non fanno altro che rifinanziare le loro obbligazioni o acquistare a loro volta il debito degli Stati, che è divenuto nel frattempo più oneroso da sostenere perchè è aumentato, e il rating è peggiorato. Le banche, quindi, chiedono interessi più alti agli Stati, e la voragine del debito pubblico aumenta in una spirale infinita. In tutto questo giro, chi ci guadagna, ancora una volta, sono proprio le banche. Ma come siamo arrivati fino a qui? Quali sono i sottili meccanismi che hanno privato gli Stati della loro sovranità? L’Ue, la Bce, l’euro, il Trattato di Lisbona, Basilea II, il Fmi, le agenzie di rating, sono tutti strumenti nelle mani della finanza, che ha piazzato i suoi uomini al vertice delle istituzioni nazionali e sovranazionali. Il potere, scippato da tecnocrati e banchieri, con la complicità di politici incapaci e corrotti, deve tornare nelle mani del popolo sovrano.

Staatsinsolvenzen sind ein topaktuelles Thema: Spätestens seit der Staatsschuldenkrise im Euroraum (auch kurz „Euro-Krise“ genannt)  infolge der weltweiten Finanz- und Wirtschaftskrise ist die Abwendung einer drohende Zahlungsunfähigkeit von Staaten eine brennende Frage, nicht nur für die betroffenen Staaten wie etwa Griechenland, Spanien oder Irland, sondern für alle Mitglieder der Eurozone, also auch für Deutschland. Doch Staatsinsolvenzen sind kein neues Thema: Seit der Erfindung des Geldes und des Kreditwesens  und der damit verbundenen Lösung von der rein materialbasierten Tauschwirtschaft sahen sich die Staatsgebilde dieser Welt mit dem Problem einer möglichen Zahlungsunfähigkeit konfrontiert. Der deutsche Politologe Uwe Wagschal geht sogar soweit zu behaupten, dass [d]ie Geschichte der Existenz von Staatswesen […] gleichzeitig eine Geschichte der Staatsverschuldung [ist]. Diese war in den vergangenen Jahrtausenden oft für das Scheitern von Regierungen und für Regimewechsel verantwortlich.  Wie viele es insgesamt gab, kann nur geschätzt werden,  aber wir wissen um die Auswirkungen vieler Staatspleiten auf die Menschheitsgeschichte: Ihretwegen wurden Regierungen gestürzt, politische Systeme ausgetauscht und Kriege geführt.

Il Fiscal compact: una macchina di governo fiscale

1.1. Introduzione 9
1.2. Quadro concettuale 11
1.3. Il processo di negoziazione del Trattato:
un attacco fallito alle costituzioni nazionali 17
1.4. Una macchina di governo fiscale 20
1.4.1. Il meccanismo correttivo automatico 23
1.4.2. Autorità indipendenti a livello nazionale 24
1.5. Conclusioni 26

The idea of 'anti-vulture legislation', i.e. domestic law dealing with holdout strategies and 'vulture' litigation against a sovereign debtor in financial distress, differs radically from existing and proposed approaches to deal with sovereign debt crises, such as the contractual approach and the proposal for an international sovereign debt restructuring mechanism. Anti-vulture laws adopted in Belgium, in the United Kingdom and, more recently, in France offer an ambitious local solution to a global problem. Motivated by these developments, we investigate the actual or hypothetical advantages attached to anti-vulture legislation compared to other approaches, and we argue that legislative interventions in sovereign debt-enforcement regimes should be made cautiously with the aim of promoting timely, orderly and equitable solutions to sovereign debt crises.

The present research aims to present and analyze the causes that led to the crisis in the Eurozone. The 2008 financial crisis revealed the weaknesses, the chronic problems and the differences which were lurking and emerged between the member states. The disparities of the economies combined with asymmetric monetary policy and political failures of member states exacerbated the problem resulting in the loss of credibility of some member states. The most vulnerable countries were those which are facing chronic debt problems and those which have directly affected by the financial crisis. The data for this investigation were collected from the databases of Eurostat and the European Central Bank. Finally, the present research concludes that the Eurozone crisis could be avoidable if the right moves have been made before the crisis and if there was a common stance for the beginning in order to tackle the problem.

In this thesis I attempted to provide a cause and effect analysis on one of Europe’s systematically most dangerous macro-financial turmoil, Italy’s banking crisis. My work tried to explore the most important roots of the crisis, identify its consequences and examine the domestic and eurozone-level crisis management measures which attempted to clean it up. The thesis was most dominantly building on the analysis of qualitative sources, but I also carried out a quantitative, statistical test to audit the relationship between the increase of public debt and the deterioration of Italian banks’ equity prices. My research confirmed that Italy’s banking crisis was the consequence of the country’s domestic structural deficiencies and the interaction of global and regional economic-financial crises. The quantitative test of the thesis registered a negative correlation between the motion of Italy’s 10-year government bond yields and the equity prices of the biggest Italian banks. Last, but not least, I came to the conclusion, that the current framework based on the hierarchy of eurozone and domestic authorities, is unable to provide a sterling solution for Italy’s banking crisis. I designed my research to be able to fill the gap in the already existing literature, as I could not find any other work which aimed to serve with the  detailed, 20-year overview of the crisis, while also trying to provide a casual chain between the crisis components.

This Thesis Paper asks the crucial question of whether the European Financial Integration is possible or not during the Economic Crisis. In order for the current situation of the economic and the political dispute across Europe to be understood, one shall closely examine the history and evolution of the Union, as well as the progress of the establishment of institutions concerning the financial policies. Thus, a close and detailed analysis of the evolution of the EU throughout history is considered notable for our question to be answered.

Agridopoulos, Aristotelis 2020: Causes, critique, and blame: A political discourse analysis of the crisis and blame discourse of German and Greek intellectuals, in: Stefan Nygård (Hg.):  The Politics of Debt and Europe’s Relations with the ‘South’, Edinburgh: Edinburgh University Press, 80–117.

In 2013, the world is entering the sixth year of the global crisis. In those six years, sparked by the unfolding events, there has developed a burgeoning literature regarding the origins, conjunctures and regional manifestations of the crisis. In many ways, this debate evolved from long-term disputes regarding the nature of the current phase of capitalism and its periodization (monopoly-finance capitalism, post-Fordism, finance driven accumulation regime, financial-market capitalism, neoliberalism, high-tech capitalism etc.) and has brought to light the epistemological and political differences between the various approaches. However, as Magnus Ryner (2012) has pointed out, with a few notable exceptions, the debate has shed insufficient light on the political articulation of the crisis and the interrelations between the political and the economic sphere. With regard to not only the origins of the crisis but also and particularly the viability of exit strategies from it, the struggles over hegemony occurring during the crisis are essential. Hence, complementing the Marxist and Marxian crisis debate, it is the goal of this paper to shed some light on the political articulations of the global crisis and assess the interrelations between global leadership efforts seeking exit strategies from the crisis and the hegemonic struggles underlying their agencies. While in looking at the struggle between left and right projects of leadership references will be made to numerous core and non-core capitalist countries, the main focus will be on the two dominant actors in NAFTA and the EU, the United States and Germany, which have shaped the politics of exit strategies from the crisis in North America and the Eurozone.

The most important current issue for both the European Union and Member States is the economic crisis and its implications for the future of the EU. Citizens across Member States of the EU, whether affected or not by the debt crisis and austerity measures, are progressively losing trust in their national governments. The political impact is profound: untimely end of governments, re-structuring of party landscapes, unpredicted and unpredictable electoral results, mass protests – are but a few examples.  Overall, citizens across the EU are increasingly sceptical of the EU’s ability to work out efficient mechanisms to deal with the worst crisis since the Union’s inception.
The overarching theoretical question is to what extent representation is tied to the EU(-ro) crisis/ failure. What types of representation/ democracy should the EU be focusing on? Closely linked to this lies the recurring question of the democratic legitimacy of the EU in light of the so-called “democratic deficit(s)” , the policymaking power of an unelected (technocratic) bureaucracy, its concomitant elitism and abstract detachment from regional concerns.
The volume will engage broadly in addressing the tensions created between national vs. EU level of government and the resulting issues, while not neglecting an EU perspective on the matter. The volume is not designed to address questions related to Eurozone countries only but the entire of the EU.
Thus, the essays in this collection intend to explore issues pertaining to democratic legitimization in European politics intrinsically woven together: the monetary union and the debt crisis/ economic growth, constitutionalism, European integration (and disintegration), European federalism vs regionalism, Euroscepticism and the British question, the limits of political participation and active citizenship, EU and Globalization.
It is important to emphasize that the volume is expected to address the various concerns/problems/pathologies threatening the future of the EU, not only on the basis of contemporary contingencies and temporary factors, but also those affecting its future development and growth.


List of Contents:
Preface, Introduction
The EU: An Ever deeper Democratic Deficit? Reconsidering Democratic Legitimacy
Kyriakos Demetriou, University of Cyprus

1 EU Democratic Deficit(s) and Legitimacy; System vs Sub-System Level
Alexander Katsaitis, School of Public Policy, University College London

2 Suspending democracy? The role of unelected bodies in the governance of the EU economic crisis. Diego Gionnone, Department of Political Sciences “Jean Monnet” of the Second University of Naples (Italy)

3 Pushing the Union forward? The role of the European Parliament in the Union crisis Fernanda Neutel- Department of Political Science and International Relations- University Lusófona- Lisbon

4 Economy and monetary union:
Mark Baimbridge, University of Bradford, UK

5 Foreign and Defence Policy and Legitimacy
Nicola Chelotti, University College London, Dept of Political Science, [email protected]
6 Britain and Europe: a model of permanent crisis?
Simon Usherwood, University of Surrey, [email protected]

7 Divided Europe? Euroscepticism in East Central and Southern Europe
José M. Magone,  Hochschule für Wirtschaft und Recht Berlin, [email protected]

8 Defeating Nationalism in Europe: Voting mechanisms for highly integrated economics
Gerhard Hanappi, University of Technology Vienna, [email protected]

9 The Brussels volcano- Toward post-national political Behaviors in the European Public Sphere?  Xavier Carpentier-Tanguy, Centre Virtuel de la Connaissance sur l’Europe, Luxembourg, [email protected]

10 The ‘reluctant hegemon’: Germany in the EU’s post-crisis constellation
Christian Schweiger, Durham University; [email protected]

11 European Union in the globalized world
Fritz Breuss, Jean Monnet Professor für wirtschaftliche Aspekte der Europäischen Integration, Wien (Vienna University of Economics and Business)

12 Review essay of Habermas’ Zur Verfassung Europas: Ein Essay (2011) Review essay of Habermas’ Zur Verfassung Europas: Ein Essay (2011)
Gulshan Khan, [email protected]

This chapter analyses the Treaty on Stability Coordination and Governance (TSCG), as an emblematic example of the New Economic Governance.
The incapacity to recognise any other structural problem beyond fiscal stability, we argue, reflects, above all, a broader problem about the way European integration has been traditionally conceptualised, that is to say a theoretical failure of European Studies itself. In that sense, this chapter seeks to contribute to the call for more dissenting voices in European Studies, going beyond the debate between neofunctionalism
and intergovernmentalism. It does so by drawing upon two critical approaches, namely governmentalities studies, and historical materialism, inspired by Gramsci and the neo-Gramscian in International Relations (IR).

On the 5th of July 2017, the European Committee of Social Rights published another decision adopted under the collective complaints procedure, condemning Greece for violating plenty of the European Social Charter provisions concerning labour rights by implementing austerity measures between 2010 and 2014. The Committee adopted a dynamic and analytical interpretation of the Charter setting new criteria, such as the need to take into account the social needs of the most vulnerable when legislating and went even further than in its previous decisions in terms of social rights protection by producing a precedent that can be used as a tool against the application of austerity policies. This paper analyses GSEE v. Greece, Complaint No. 111/2014 before the Committee and attempts to review it under a multi-level context.

The media coverage of the Eurozone crisis and Germany’s role in it has received much academic interest, however the Portuguese media discourses have been largely disregarded in most studies. As this thesis suggests, it is important to be aware of media discourses because they play an important role in shaping public opinion and public policy making. In this sense, this thesis explores common narratives and representations that are used to make sense of Germany’s role in the Eurozone crisis (2011-2014) in various types of Portuguese media. In order to gain an insight in both hegemonic and alternative narratives, the analysis included articles from two major newspapers, Público and Jornal de Notícias, as well as minor media: street art, graffiti and public protests. It was assumed that these two types of media would use different discourses on Germany but in fact, there were many similarities.
Through narrative analysis, two prevalent narratives have been identified that were used both in the press and in minor media. The first narrative was marked by a reductionist discourse. Chancellor Angela Merkel was represented as Hitler’s doppelgänger aiming to establish a “Fourth Reich” through imposing draconic economic measures on other European countries. The second narrative revolves around the perceived unequal relationship between Portugal and Germany. By the use of different metaphors such as the puppeteer, the teacher and the doctor, Germany is portrayed as a superior power that Portugal bows to either voluntarily or involuntarily. Using Jack Lule’s approach of the seven master myths, it is argued that much of the Portuguese news coverage and the minor media are shaped by the ancient myth of the scapegoat. Casting Germany as a scapegoat is not unique to the Portuguese media but this myth has also been found for instance in Greek media. Contrariwise, it is pointed out that German media portrays the countries commonly known as PIGS (Portugal, Italy, Greece, Spain) as lazy and participates in the process of mutual scapegoating, which could provoke dangerous consequences and lead to further European disintegration.

Euro Borç Krizi’nin yarattığı olumsuzlukların İtalya’nın var olan ekonomik
sorunlarıyla birleşmesinin ardından ekonomik parametreler günden güne negatif bir görünüm
sergilemeye başlamıştır. Özellikle büyüme oranlarındaki düşüş, işsizlik oranlarında
kaydedilen artışlara ek olarak, reel sektörün kullandığı enerji tüketimi ve enflasyon
oranlarının düşüş göstermesi, ülkede seyreden durgunluğu kanıtlar niteliktedir. Nitekim
krizin, finans ve reel kesim üzerindeki etkileri yıkıcı olmuş ve İtalya ekonomisine yansıması
giderek dramatik bir boyut kazanmıştır.

Panel 30: Great Refusals: Refusing One Dimensionality Today

The Dialectics of Liberation in an Age of Neoliberal Capitalism

International Herbert Marcuse Society

Seventh Biennial Conference

26-28 October 2017

York University

https://marcuseconference.wordpress.com/

This paper utilises discourse theory in analysing the construction of the European ‘sovereign debt crisis’ narrative in spring 2010. It charts the trajectory of the narrative and examines the political subject positions within it in order to outline the hegemonic political discursive practises that structure the social order in Europe. The post-financial crisis Keynesian discourses and responses represented a structural dislocation in the neoliberal order. It was in this context that the European automatic stabilisers, particularly the public transfer mechanisms, became identified by the financial sector as a failure of governmental fiscal policy. The fiscal ‘failure’ narrative was acted upon by the discursive political actors, the European Central Bank, EU civil servants and the elected sovereign politicians. This paper argues that the European ‘sovereign debt crisis’ was constructed as a nodal point for an absent neoliberal order, discursively ‘fixing’ the chain of signification according to neoliberal ideology, constructing a fiscally reinforced neoliberal political project aiming at reducing the European automatic stabilisers. This was according to a preferred historical and institutional neoliberal unity that could be reimposed upon the disaggregated structures and institutions within a post-financial crisis Europe. The European ‘sovereign debt crisis’ has reconstructed the global neoliberal order where the market – and the rating agencies – have reclaimed their hegemony over public policy.

A crucial aspect of many heterodox approaches to modern capitalism, finacialization and crisis is the idea that the domination of neoliberalism and of the globalized financial sector of the economy produces a predatory version of capitalism, a capitalism that inherently tends towards crisis.
This paper argues in totally different direction: neoliberalism is an exceptionally effective strategy for capitalist (and not rentier) hegemony. It is a form of capitalist goverrnmentality, i.e. of organizing the power of capital over the working classes and the social majority. It is based on the one hand on austerity, and on the other on the crucial regulatory role of the globalized financial markets. The financial sphere is not simply the reign of speculation, is not a casino, it is much more an overseeing mechanism.In this global environment, the institutional framework of the Euro-Area and more specifically the workings of the ECB, function as an additional mechanism reinforcing neoliberal governance and austerity policies in Europe.

Garland, C. (2014) ‘As Barriers Fall, Contingency Becomes Possibility: Protest Resisting and Escaping Containment and Categorization’, Part II Identity, Embodiment and Categorisation in Eds. Lamond, I. and Spracklen, K. 'Protests as Events: Politics, Activism and Leisure (London: Rowman & Littlefield International) Hardback ISBN/9781783480760 Paperback ISBN/978-1-78348-077-7 eBook ISBN/978-1-78348-078-4 

https://rowman.com/ISBN/9781783480760

Since 2008, euro-area sovereign yields have diverged sharply, and so have the corresponding CDS premia. At the same time, banks' sovereign debt portfolios featured an increasing home bias. We investigate the relationship between these two facts, and its rationale. First, we inquire to what extent the dynamics of sovereign yield differentials relative to the swap rate and CDS premia reflect changes in perceived sovereign solvency risk or rather different responses to systemic risk due to the possible collapse of the euro. We do so by decomposing yield differentials and CDS spreads in a country-specific and a common risk component via a dynamic factor model. We then investigate how the home bias of banks' sovereign portfolios responds to yield differentials and to their two components, by estimating a vector error-correction model on 2008-12 monthly data. We find that in most countries of the euro area, and especially in its periphery, banks' sovereign exposures respond positively to increases in yields. When bank exposures are related to the country-risk and common-risk components of yields, it turns out that (i) in the periphery, banks increase their domestic exposure in response to increases in country risk, while in core countries they do not; (ii) in most euro area banks respond to an increase in the common risk factor by raising their domestic exposures. Finding (i) hints at distorted incentives in periphery banks' response to changes in their own sovereign's risk. Finding (ii) indicates that, when systemic risk increases, all banks tend to increase the home bias of their portfolios, making the euro-area sovereign market more segmented.

Although the perceived lack of a European identity has always been an issue in the legitimisation of the EU, the economic crisis has intensified the struggles between national and European group identities. The main focus of this thesis the way group identities are represented in the coverage of the EU by two Dutch newspapers, the Telegraaf and NRC Handelsblad, in 2005 and 2012, before and after the start of the crisis. Using Jenkins’ (2008) definition of social identity, the way in which different in- and out-groups are represented in the articles is analysed. In line with Lengyel (2014), a more positive and stable representation of the EU was found in the more ‘elite’ NRC Handelsblad, with a more Eurosceptic and changing attitude in the more ‘populist’ Telegraaf, creating a divergence between the two newspapers. Also, in accordance with Etzioni (2013), the representation of the EU as a political community in NRC Handelsblad in both years can be seen as a reason for the relative stability of its discourse, with the more utilitarian attitude towards the EU in the Telegraaf explaining the radicalisation of its articles after the economic crisis. Finally, the main conclusion of this thesis is that contrary to Eder’s (2012) claim that the economic crisis is a critical point in the development of a European identity, the results of this thesis indicate that there are no radical changes in the identities found or the way they are described, and instead point towards a strengthening of an already preexisting discourse.

Reference:

de Jong, Jan. "The EU Crisis And European Identities In The Netherlands: Analysing Representations of the EU in the Dutch Press in 2005 And 2012". Identity, Nation, City: Perspectives from the TEMA Network. Jaroslav Ira, Jan de Jong and Imre Tarafás. 1st ed. Budapest: Atelier, 2015. 47-66. Print.

For the full book, please refer to:

https://www.academia.edu/21830140/Identity_Nation_City_Perspectives_from_the_TEMA_network

The sovereign debt crisis affecting several eurozone countries is a threat to Europe’s fi nancial stability and has
had signifi cant international repercussions. The fear of a default within the eurozone has spread from Greece to
other states. The various summits that have taken place on the subject have provided only partial and insuffi cient
responses to the problems confronted. For several months now, it has appeared that one of the main impediments
to resolving the crisis has been the massive exposure of the fi nancial sector to the debt of eurozone states. A fall
in the value of this debt, owing to investor distrust, may lead to banks requiring fi nancial injections to protect their
capital positions. As a result, additional funds might well be required from eurozone states. Such support might
come from the states directly or come from them indirectly via the European Financial Stability Facility: a double
hit for eurozone members. The crisis has made clear the fundamental imbalances in the economies of European
states that have, for many years, fi nanced modest economic growth through a steady increase in public and private
indebtedness. The eurozone’s problems have also demonstrated that the risk of sovereign default is real and not
merely theoretical. Because of a general failure, pre-crisis, to contemplate the possibility of a default in the eurozone,
a satisfactory legal framework for sovereign debt on sovereign default has not been constructed, a consensus
on accounting standards for assessing the value of risky debts has not emerged, and adequate rating methodologies
which can be relied upon in unprecedented circumstances have not been devised. These three technical aspects
of the sovereign debt matrix (the legal framework, assessment for accounting purposes and credit rating) have not
been at the forefront of public attention. They are, however, critical to the effective management of the crisis. This
article explores constraints on the policy options available for dealing with the eurozone crisis, explains the reasons
behind certain policies which have already been adopted to tackle the crisis, and proposes a number of possible
reforms which could help resolve the crisis.

This paper studies the dynamic propagation mechanisms of systemic risk shocks within and across macrosystems of governments and financial institutions. We propose a novel approach to identify relevant systemic shocks and to classify them into sovereign or banking categories. We find that sovereign shocks have a significant and persistent impact on the probability of a collective banking default. We also explore channels through which these shocks propagate and identify how sovereign fiscal fragility and banking exposure are relevant mechanisms of shock transmission. This paper was accepted by Gustavo Manso, finance.

The European sovereign debt crisis negatively impacted economies across the world, including South Africa’s. This essay focuses specifically on how this crisis, which was somewhat precipitated by the Great Recession of 2008-09, impacted South Africa’s (SA) economy. The essay follows a chronological discussion. Firstly, it is focused on the state of the South African economy and South Africa’s fiscal policy before the Great Recession. Secondly, it describes how SA’s economy responded to the European sovereign debt crisis, which started in 2009, and what domestic policy changes were made. Finally, SA’s economic recovery since the crisis is discussed, with mention being made to policy changes in recent years. The essay makes use of the aggregate demand - aggregate supply (AD-AS) model and other elementary economic concepts in order to provide an economic analysis of the events being described.