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2018 | Book

Causes and Consequences of Crisis in the Eurozone Periphery Read chapter Read first chapter

Crisis in the Eurozone Periphery

The Political Economies of Greece, Spain, Ireland and Portugal

Editors: Dr. Owen Parker, Dimitris Tsarouhas

Publisher: Springer International Publishing

Book Series : Building a Sustainable Political Economy: SPERI Research & Policy

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book investigates the causes and consequences of crisis in four countries of the Eurozone periphery – Greece, Spain, Portugal and Ireland. The contributions to this volume are provided from country-specific experts, and are organised into two themed subsections: the first analyses the economic dynamics at play in relation to each state, whilst the second considers their respective political situations. The work debates what made these states particularly susceptible to crisis, the response to the crisis and its resultant effects, as well as the manifestation of resistance to austerity. In doing so, Parker and Tsarouhas consider the implications of continued fragilities in the Eurozone both for these countries and for European integration more generally.

Table of Contents

Frontmatter
Chapter 1. Causes and Consequences of Crisis in the Eurozone Periphery
Abstract
This volume considers the political economy dynamics that both caused and were precipitated by the Eurozone crisis in four of the hardest-hit so-called periphery country cases—Ireland, Spain, Portugal and Greece. This introduction focuses on the broader structures that underpinned the Eurozone crisis, whereas the chapters that follow zoom in on domestic cases. It argues that a single currency designed in accordance with neoliberal ‘efficient market’ ideas was at the heart of the crisis, exacerbating dangerous economic divergences between a so-called core of creditor states and periphery of debtor states. Responses to the crisis were, it is suggested, premised on the very same neoliberal ideas and made matters worse for a struggling ‘periphery’. More effective responses exist in theory, but are politically difficult in practice.
Owen Parker, Dimitris Tsarouhas
Chapter 10. Conclusion
Abstract
The Eurozone crisis had a profound effect on the countries of the periphery—Ireland, Spain, Portugal and Greece—considered in this book as the chapters have articulated. Drawing together the insights from those chapters, this short conclusion suggests that while there were common causes and structural constraints on these countries (see also Introduction), there were also important domestic differences in their political economies, which meant that their trajectories through the crisis were different. It offers a comparative analysis of the cases, pointing to both those differences and important similarities.
Owen Parker, Dimitris Tsarouhas

The Economic Dynamics of the Crisis

Frontmatter
Chapter 2. Tracing Ireland’s ‘Liberal’ Crisis and Recovery
Abstract
Ireland’s deep crisis after 2008 was most immediately produced by the bursting of a real estate and banking bubble combined with collapsing tax revenues. This was made possible by Ireland’s continuing weakness in developing indigenous enterprise and investment, its limited social contract and emergent tensions in its historical external ties with the UK, the USA and Europe. More generally, the character of Ireland’s crisis was rooted in its varied history of economic liberalism, and particularly in an aggressive liberalism of the 2000s that succeeded earlier periods of passive and activist liberalism. Finally, despite recent economic and employment growth, Ireland’s recovery remains tenuous, given the re-emergence of historical patterns and the failure to address some key dilemmas in the ‘Irish model’.
Seán Ó Riain
Chapter 3. The Spanish Economic ‘Miracle’ That Never Was
Abstract
The expansive phase experienced by the Spanish economy had long been praised, described in the early 2000s as an ‘economic miracle’. However, the crisis that struck in the late 2000s would become the deepest that the country had endured since at least the 1970s, leading to the general conclusion that its prior success had been a mirage rather than miracle. Using a political economy approach, this chapter identifies and analyses the factors that allow us to understand the Spanish model, including the role played by Spain in the European division of labour; the institutional framework of the domestic economy; and the key agents that have been central to the configuration of the whole model. Finally, it considers the distributive effects and consequences of the model.
Luis Buendía
Chapter 4. Portugal’s Economic Crisis: Overheating Without Accelerating
Abstract
Portugal’s economic crisis was characterised by the experience of ‘all of the signs of overheating … without any acceleration of GDP’ (Deutsche Bank 2010). This chapter traces how the introduction of European Community/European Union (EU) facilitated ‘structural reforms’ throughout the 1980s and 1990s contributed to the development of new and dangerous patterns of debt-led growth. In the 1990s, a rejuvenated private banking sector drove the expansion of economic growth in Portugal’s non-tradable sector, damaging the country’s competitiveness and creating some of the highest levels of private debt in the EU. This trajectory of economic growth contributed to a decade of recession in the 2000s, ensuring that Portugal was particularly vulnerable to contagion from the Greek and Irish crises from 2010 onwards.
Neil Dooley
Chapter 5. Greece and European Monetary Union: The Road to the Demise of the Greek Economy
Abstract
Even prior to the crisis, the Greek economy had been plagued by structural inefficiencies, which were responsible for the gradual decline of its economic performance. At the same time, the structural inefficiencies of both modern capitalism in general and the architecture of European Monetary Union in particular have worsened conditions for the country after the global financial meltdown of the 2007–2008 period. This chapter identifies major factors behind the build-up to the crisis that Greece has been facing, pointing to domestic inefficiencies and externally imposed rigidities. Their combination has led to an inability to escape the current death spiral.
Pavlos Gkasis

The Political Dynamics of the Crisis

Frontmatter
Chapter 6. Narrating Crisis in Ireland’s Great Recession
Abstract
The demise of Ireland’s ‘Celtic Tiger’ is said not to have been the fault of any one group or class, but rather the result of something akin to a national weakness of character. Nevertheless, debate over solutions to the crisis has been organized around a distinction between those who accept and those who reject austerity. Reviewing the origins of this discourse, this chapter identifies two phases in Ireland’s crisis. The first, from 2008 to 2013, is exemplified in the debates surrounding Ireland’s public sector pay reforms. The second begins with the departure of the Troika and concerns Ireland’s recovery. It is often remarked that ‘the Irish don’t protest’, but recent mobilization and the results of the 2016 election suggest the need to reconsider this argument.
Nicholas Kiersey
Chapter 7. The Unfolding of Spain’s Political Crisis: From the Squares to the Ballot Box
Abstract
Spain’s economic crisis became a political crisis from 2011, when protest movements erupted in response to the direct effects of the former and the austerity regime that followed. However, this chapter suggests that the particularities of developments from 2011 are explicable not simply with reference to the proximate economic crisis but require an examination of Spain’s broader transition from dictatorship from the 1970s and its Europeanisation thereafter. Prioritising stability, that transition was built upon the marginalisation or incorporation of non-mainstream groups and the formation of a narrow two-party system. It is against this backdrop that this chapter traces post-2011 events: the emergence of the ‘indignados’ movement, the growth of separatism in Catalonia and the institutional challenges to the status quo at both local and national levels.
Mònica Clua-Losada
Chapter 8. Portuguese Democracy Under Austerity: Politics in Exceptional Times
Abstract
This chapter addresses the changes produced in the Portuguese political system in the wake of the sovereign debt crisis. While in many European countries traditional political parties have lost a large share of the votes to anti-systemic parties, Portugal has bucked the trend. However, the crisis has produced a major political change, otherwise impossible, given past antagonisms. A Socialist minority government is now supported in Parliament by the other two left-wing political parties (the Portuguese Communist Party and the Left Bloc). The alliance, in its second year at the time of writing, has been gradually reversing austerity measures, offering an interesting example of anti-austerity politics in (governmental) practice.
Isabel David
Chapter 9. Continuity and Change in Greek Politics in an Age of Austerity
Abstract
This chapter discusses the impact of austerity policies on Greek politics and attempts to identify patterns of continuity and change in the post-1974 era. The first part maps the evolution of politics in Greece, with a focus on the development of the clientelistic state, which shaped state policies largely based on political cost. The second part discusses the changes occurring post-2010, including the decline of the socialist PASOK in favour of the rise of fringe populist parties. It is argued that the political and social turmoil created by the austerity measures adopted have been conditioned by the already existing particular brand of populist and clientelistic governance, which stood at the core of the country’s party political system at least since the 1980s.
Alexandra Prodromidou
Backmatter
Metadata
Title
Crisis in the Eurozone Periphery
Editors
Dr. Owen Parker
Dimitris Tsarouhas
Copyright Year
2018
Electronic ISBN
978-3-319-69721-5
Print ISBN
978-3-319-69720-8
DOI
https://doi.org/10.1007/978-3-319-69721-5