Whatever Happened to Greece?

The sovereign debt crisis in Greece and other periphery countries is a yardstick for the viability of the European project: if Greece defaults and exits the Euro‐zone, then the entire European architecture will be questioned. This article examines the origins of the Greek debt crisis and argues that the key sources of the debt are the economic and political factions that have dominated Greek politics since the fall of the Colonels in summer 1974 amidst the Cyprus calamity. These factions (political parties, comprador economic interests etc.), whose policy actions and preferences are amalgamated with the interests of Euro‐Atlantic elites, are now being severely undermined, both politically and economically, as the prosperity of the Greek middle classes is eroded following two years of harsh austerity measures imposed on the Greek ruling factions by those Euro‐Atlantic elites. Furthermore, this article outlines ways out of the Greek debt crisis, putting into test some reasonable policy proposals that are being widely discussed in Greece and abroad.     

The British Labour Party and monetary union

The real test of the British Labour Party's new orientation to Europe will be its policy on economic and monetary union (EMU). This article analyses Labours political economy in relation to European integration and to the management of the currency, and how the intersection of these two have produced four distinctive approaches to EMU within the party. It assesses the stance of new Labour towards EMU in the context of this internal Labour Party debate as well as in the wider context of European social democracy.     

When success is an orphan: informal institutional governance and the EU–Turkey deal

This article traces the role of the EU institutions in the process leading up to the EU–Turkey Action Plan and EU–Turkey Statement. The EU–Turkey deal is the proverbial ‘orphan’ in EU crises management, with none of the key actors and institutions eager to claim ownership. Yet when judged from the perspective of process management, the deal resulted from effective inter-institutional collaboration, which stands in stark contrast to the EU’s handling of the relocation schemes or the Dublin reform. Using insights from the informal governance literature, the article maps the inter-institutional network that managed this process, traces the activities within the network, and determines the effects these had on the final outcome. On an analytical level, the mechanism contains five key elements of informal institutional governance: linking, bridging, shielding, laying out the tracks and creative fixes. The conclusion reflects on the wider applicability and scope conditions of this mechanism.     

Debt intolerance and the 90 per cent debt threshold: two impossibility theorems

Abstract

Two propositions underpin the retreat from post-crisis fiscal expansion instituted by several G7 governments in the summer of 2010. One is that the threat of debt intolerance is general: the reasoning is that the sharp rise in government debt levels caused by post-crisis fiscal expansion will force investors to abandon government bonds in favour of some other asset class. The other proposition is that there is a one-size debt threshold: the reasoning is that no government, those of the G7 countries included, can escape the serious consequences of debt intolerance and the threat of exit should its debt to GDP ratio reach 90 per cent. This paper argues that neither of these propositions can have credibility at a time of continuing global economic slowdown and consequent contraction in the global supplies of investable assets. At such a time investors cannot possibly hold up the threat of intolerance to core economy governments because they have no choice but to store substantial portions of their wealth in the latter's bonds, a fact which in turn means that the debt thresholds for core economy governments cannot possibly be the same as the average for other governments.     

After the green gold rush: the construction of climate change as a market transition

Abstract

This paper examines the emergence of a representation of climate change amongst business and political elites as an axiomatic frame of long-term economic strategy. In this representation, the rationale for action on climate change is liberated from the premise of an exogenous physical threat, and replaced by incentives endogenous to the market in the form of opportunities in the so-called carbon economy. The relationship between climate science and action upon climate change has in this process become markedly different from common assumptions whereby science is either ignored or obfuscated, or followed faithfully as the evidence base for policy. Strikingly, the abandoning of climate ontology as irrelevant to corporate decision-making has enabled a large-scale investment of capital into the policies nominally designed to tackle climate change.     

Economic crisis,downsizing and “layoff survivor's syndrome”

This article deals with layoff survivor's syndrome following the 1997 economic crisis in South Korea. South Korea has been credited with quickly recovering from its economic crisis by implementing policies aimed at economic restructuring. However, researchers have discovered that, in addition to those directly affected by a lay-off, layoff survivors as well suffer from impacts on their mental health — hence the name, layoff survivors' syndrome. The present research focuses on the socio-psychological impact of downsizing on layoff survivors on the basis of a nationwide survey. The findings reveal a significant difference in work attitudes after downsizing, as well as a significant impact on survivors' mental health. The study concludes that these negative impacts may negatively influence organizational productivity, and thus downsizing as a blanket strategy for organizational renewal needs to be reconsidered.     

Paisaje antes de la batalla. Notas sobre el contexto de la guerra contra las drogas en México

Mexico’s security crisis and Felipe Calderón’s (2006-2012) security strategy had its roots in drug trafficking, the prohibition of drugs, contraband and the border shared with the United States. Standard accounts of the violence experienced in the country, which reduce it to confrontations between drug cartels, are of little use. This article presents part of the context in which the security crisis developed, putting it in a historical perspective, and attempting to take a step towards a more nuanced interpretation. It holds that drug trafficking between Mexico and the United States is a complex, many-sided reality which admits dense symbolic elaboration. Apart from the very concrete shipping of drugs, drug trafficking is part of Mexico’s relation with the United States, a register that imbues the asymmetry between both countries with meaning, a space of political negotiation and a resource of American global diplomacy which is crystallized in a clandestine foreign policy system. Furthermore, through the demystification of the imagery that envelopes organized crime, corruption and contraband are examined, conceiving these two as phenomena that are integrated organically into borderland society.     

Financial transitions in the PRC: banking on the state?

The reappearance of substantial debt in China after 2008 has refocused attention on the sustainability of the existing financial ‘model’. It’s not just that ‘traditional’ forms of bank-centred debt have re-emerged, but that the informal ‘shadow banking’ sector also seems increasingly fragile, generating debts that do not seem easy to repay. Explanations for the current situation focus on the way in which China responded to the global financial crisis, and on the incentives that exist to go outside the formal and more regulated banking system into often riskier activities. But there are more fundamental structural issues. The current financial system contains within it some of the dna of its predecessor, while the spatial distribution of power and authority is inextricably linked to the way the financial system functions. While it might be possible to tinker with some elements of current financial problems, the relationship between local government financing, land, the banking system and key economic sectors makes it difficult to resolve more structural issues without taking a holistic approach; one that would have fundamental consequences for the nature of the Chinese state, and the distribution of power within it.     

Determinants of developing country debt: the revolving door of debt rescheduling through the Paris Club and export credits

Programmes designed to alleviate developing country debt have been implemented by bilateral, commercial and multilateral creditors and sovereign debt has been restructured under Paris Club negotiations. These strategies have not been very successful at reducing the debt levels of developing countries, in part because they continue to receive export credit insurance facilities through export credit agencies (ecas). The purpose of this paper is to examine the high percentages of developing country debt owed to governmental ecas. Analysis of the external debt of low-income and lower middle-income economies at five year intervals from 1980 to 2010 finds a substantial part of the indebtedness of these economies is held by ecas. Analysis of specific sub-Saharan African countries undergoing debt rescheduling and forgiveness through Paris Club negotiations was done for Ghana and Kenya. These results show that, following debt restructuring, new export credit guarantees and/or loans were forthcoming to these countries from the ecas of the creditor countries that rescheduled their old debt in Paris Club negotiations during 2000–12.     

Electoral Cycles And Local Government Debt Management

The literature provides both theories and empirical assessments that link national electoral cycles and opportunistic incumbents' behaviour. However, at the subnational level the literature is scarce. Using a panel of 238 Spanish municipalities over the period 1992–2005, this paper investigates for the first time in Spain whether electoral events contribute to shape municipal debt policies. We show that the electoral cycle influences the municipal debt per capita. Furthermore, both weak (no-majority) and wealthier municipal governments have higher levels of debt per capita. Finally, our data show that the 2001 Spanish Budgetary Stability Law (stemming from the European Stability and Growth Pact) appears to have reduced the electoral effect on municipal debt per capita.