Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-13T10:06:03.016Z Has data issue: false hasContentIssue false
  • English
  • Français

Complexity, coupling and policy effectiveness: the European response to the Greek sovereign debt crisis

Published online by Cambridge University Press:  15 June 2012

Nikolaos Zahariadis
Nikolaos Zahariadis*
Affiliation:
Department of Government, Political Science, University of Alabama at Birmingham, USA
*
Nikolaos ZahariadisProfessor Department of Government 410 HHB University of Alabama at Birmingham Birmingham AL 35294 USA Tel.: 1 (205) 934-3482; Fax: 1 (205) 975-5712 Email: nzaharia@uab.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

What is the impact of Greece's fiscal meltdown on the effectiveness of Europe's response? Using Perrow's normal accidents theory, I argue that efforts to reduce the likelihood of a Greek default activated conflicting centripetal and centrifugal modes of governance. Greater centralisation in decision-making at the European Union level improves policy effectiveness because it addresses problems of contagion but it simultaneously raises the risk of overall failure by increasing diagnosis, coordination and compliance costs. Three episodes are explored: the first bailout in May 2010, the mid-term fiscal strategy in June–July 2011 and the second bailout in February 2012. Implications are drawn for theories of delegation, intergovernmentalism and the future of EU crisis management.

Keywords

Greecesovereign debt crisiscrisis managementEconomic and Monetary Unionnormal accidents theorypolicy effectiveness
Type
Research Article
Information
Journal of Public Policy , Volume 32 , Issue 2 , August 2012 , pp. 99 - 116
Copyright
Copyright © Cambridge University Press 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alves, R. H.Afonso, O. (2007) The ‘new’ Stability and Growth Pact: more flexible, less stupid? Intereconomics 42(4): 218–225.CrossRefGoogle Scholar
Baker, L., Toyer, J. (2011) Europe agrees sweeping new action on debt crisis, Reuters, 21 July at www.reuters.com/article/2011/07/21/us-eurozone-idUSTRE76I5×620110721Google Scholar
Bartolo, J. (2009) Collecting Taxes during an Economic Crisis: Challenges and Policy Options, IMF Staff Position Note SPN/09/17, Washington, DC: IMF.Google Scholar
Beattie, A. (2011) Europe's successes undermined by ‘parochialism’, Financial Times, 14 September at www.ft.com/intl/cms/s/0/393be280-dedf-11e0-9130-00144feabdc0.html?ftcamp=rss&ftcamp=crm/email/2011915/nbe/BrusselsBrief/product#axzz1dhjJyctTGoogle Scholar
Boin, A., ‘t Hart, P., Stern, E.Sundelius, B. (2005) The Politics of Crisis Management. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Castle, S. (2012) Europe agrees on new bailout to help Greece avoid default, New York Times 20 February at www.nytimes.com/2012/02/21/world/europe/agreement-close-on-a-bailout-for-greece-european-finance-ministers-say.html?ref=greeceGoogle Scholar
Daviter, F. (2011) Policy-Framing in the European Union. Basingstoke, UK: Palgrave Macmillan.CrossRefGoogle Scholar
De Grauwe, P. (2006) What have we learnt about monetary integration since the Maastricht Treaty? Journal of Common Market Studies 44(4): 711–730.CrossRefGoogle Scholar
De Santis, R. O. (2012) The Euro Area Sovereign Debt Crisis: Safe Haven, Credit Rating Agencies and the Spread of the Fever from Greece, Ireland and Portugal, Working Paper No 1419, Frankfurt: European Central Bank.Google Scholar
Donadio, R. (2012) Growing air of concern in Greece over new bailout, New York Times, 21 February at www.nytimes.com/2012/02/22/world/europe/euro-zone-leaders-agree-on-new-greek-bailout.html?ref=global-homeGoogle Scholar
Dyson, K. (2009) The evolving timescapes of European economic governance: contesting and using time. Journal of European Public Policy 16(2): 286–306.CrossRefGoogle Scholar
Elliott, L. (2010). No EU bailout for Greece as PM promises to ‘put our house in order’, Guardian, 28 January at www.guardian.co.uk/business/2010/jan/28/greece-papandreou-eurozoneGoogle Scholar
European Commission (2009) Economic Crisis in Europe: Causes, Consequences and Responses, European Economy #7 at ec.europa.eu/economy_finance/publications/publication15887_en.pdfGoogle Scholar
European Commission (2006) Public Finances in EMU 2006: The First Year of the Revised Stability and Growth Pact, COM/2006/304.Google Scholar
European Commission (2010) The Economic Adjustment Programme for Greece. Brussels: European Commission.Google Scholar
[Fabiano (2007) ?].Google Scholar
Featherstone, K. (2011) The Greek sovereign debt crisis and EMU: a failing state in a skewed regime. Journal of Common Market Studies 49(2): 193–217.CrossRefGoogle Scholar
‘Fotopoulos: ‘ΔEH will not be Used as Tax Collection Mechanism’,’ (2011) To Vima (in Greek) 12 September at www.tovima.gr/society/article/?aid=419128&h1=trueGoogle Scholar
Franchino, F. (2007) The Powers of the Union. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Hadjinikolaou, P. (2011). ‘White strike’ and tragically low performance in tax collection agencies, Kathimerini (in Greek) 23 July at www.ekathimerini.gr/4dcgi/_w_articles_economy_100025_23/07/2011_450244Google Scholar
Haggard, S. (2000) The Political Economy of the Asian Financial Crisis. Washington, DC: Institute for International Economics.Google Scholar
Heipertz, M.Verdun, A. (2010) Ruling Europe. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Heise, A. (2008) European economic governance: what is it, where are we and where do we Go? International Journal of Public Policy 3(1/2): 1–19.CrossRefGoogle Scholar
Hope, K., Tait, N.Peel, Q. (2010) Greece rescue sealed as eurozone ministers agree €110 bn loan package. Financial Times 3 May, 1.Google Scholar
International Monetary Fund (IMF) (2010) Greece: Staff Report on Request for Stand-by Agreement, IMF Country Report No. 10/110, Washington, DC: IMF.Google Scholar
IMF (2011) Greece: Fourth Review under the Stand-By Arrangement and Request for Modification and Waiver of Applicability of Performance Criteria, Country Report No. 11/175, Washington, DC: IMF.Google Scholar
Jones, B. D.Baumgartner, F. B. (2005) The Politics of Attention. Chicago: University of Chicago Press.Google Scholar
Kikeri, S. (1997) Privatization and Labor: What Happens to Workers when Governments Divest? World Bank Technical Paper 396, Washington, DC: World Bank.Google Scholar
Kyriakidou, D.Neogy, A. (2011) Greek PM ready to go, dump referendum, for euro deal, Reuters 3 November at www.reuters.com/article/2011/11/03/us-g-idUSTRE7A20E920111103Google Scholar
Kontogiannis, D. (2010) Athens hopes deep cuts will restore confidence. Financial Times, 4 March, 2.Google Scholar
Kroustalli, D. (2011) Greece reaches its limit, To Vima (in Greek) 4 September at www.tovima.gr/politics/article/?aid=417697Google Scholar
Lo, A. W. (2009) Regulatory reform in the wake of the financial crisis of 2007–2008. Journal of Financial Economic Policy 1(1): 4–43.CrossRefGoogle Scholar
Manolopoulos, J. (2011) Greece's ‘Odious’ Debt. London and New York: Anthem Press.Google Scholar
Moore, T. (2010) German voters punish Merkel for bailing out Greece, Time 10 May at www.time.com/time/world/article/0,8599,1988312,00.htmlGoogle Scholar
Papadopoulos, P. (2011) How did we get to the ‘bankruptcy tango’? To Vima (in Greek) 16 October, A16.Google Scholar
Perrow, C. (1999) Normal Accidents. Princeton: Princeton University Press.Google Scholar
Peters, B. G. (2011) Governance responses to the fiscal crisis – comparative perspectives. Public Money & Management 31(1): 75–80.CrossRefGoogle Scholar
Petrakis, M. (2009) Greece's Papandreou may have to ditch fiscal pledges, Bloomberg.com 7 December at www.bloomberg.com/apps/news?pid=newsarchive&sid=abWn72Zt8DpkGoogle Scholar
Puetter, U. (2012) Europe's deliberative intergovernmentalism: the role of the Council and European Council in EU economic governance. Journal of European Public Policy 19(2): 161–178.CrossRefGoogle Scholar
Quaglia, L., Eastwood, R.Holmes, P. (2009) The financial turmoil and EU policy cooperation 2007–8. Journal of Common Market Studies Annual Review 47(1): 1–25.Google Scholar
Rothstein, B. (1998) Just Institutions Matter. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Scharpf, F. W. (2011) Monetary Union, Fiscal Crisis and the Preemption of Democracy, MPIfG Discussion Paper 11/11, Cologne: Max Planck Institute for the Study of Societies.CrossRefGoogle Scholar
Schelkle, W. (2011) A tale of two crises: the euro area in 2008–09 and in 2010. European Political Science, 10: 375–383.CrossRefGoogle Scholar
Spiegel, P., Peel, Q. (2011) Split opens over Greek bail-out terms, Financial Times 28 September at www.ft.com/intl/cms/s/0/69902e72-e926-11e0-af7b-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2011928/nbe/WorldNews/product#axzz1dhjJyctTGoogle Scholar
Stein, J. L. (2011) The diversity of debt crises in Europe. Cato Journal 31(2): 199–215.Google Scholar
Trichet, J-C. (2010) State of the Union: the financial crisis and the ECB's response between 2007 and 2009. Journal of Common Market Studies 28(Special Issue): 7–19 September.CrossRefGoogle Scholar
Verdun, A. (2009) Regulation and cooperation in economic and monetary policy. In Tommel and A. Verdun (Eds), Innovative Governance in the European Union. Boulder, CO: Lynne Rienner.Google Scholar
Wyplosz, C. (2005) Fiscal policy: institutions versus rules. National Institute Economic Review 191, January, 70–84.CrossRefGoogle Scholar
Zahariadis, N. (2003) Complexity, coupling, and European integration. Review of Policy Research 20(2): 285–310.CrossRefGoogle Scholar
Zahariadis, N. (2010) Greece's debt crisis: a national tragedy of European proportions. Mediterranean Quarterly 21(4): 34–58.CrossRefGoogle Scholar