How to Deal with the Current Greek Crisis

The problem for Greece is that meeting most of the austerity focused demands won’t do anything for growth, which Greece desperately needs.  And another year of austerity is unsustainable—after five years of utter misery with a drop of 25% in GDP and an increase to over 50% youth unemployment, with a humanitarian crisis the result.

While the Council and Commission have actually introduced increasing flexibility into the interpretation of the rules for ‘normal’ (non-program) countries, and have put the emphasis on investment and growth-oriented ‘structural’ reforms, they appear to remain largely inflexible on Greece.  The problem is that while some Northern European countries (Germany but also Finland) believe that austerity works, governments of countries that have had to impose austerity on their own populations (especially the Baltics, Spain, and Portugal) or are now in the midst of putting ‘structural reforms’  of labor markets and pension systems (France and Italy) are not about to let Greece off the hook, for fear of their own constituencies’ responses.  But this is counter productive.

Greece needs to stay in the Eurozone for its own benefit as well as everyone else’s.  But what they need is not yet another austerity program.  Instead, why not recognize that they need growth, and give the government a two year period of grace…no austerity, release of the monies to repay the IMF, and ECB guaranteed bank liquidity  in exchange for an agreement from the unions not to raise wages, for the government to collect taxes from the non-paying rich (including the expatriates with the help of international institutions), major reform of the state administration, rationalization of the rules to make it easier to start businesses, plus investment funds for small and medium sized enterprises, to reignite the private sector that has been dying on the vine these last few years.  Moreover, the EU ‘institutions’ (formerly known as the Troika) should transform themselves, moving from ‘enforcers’ to ‘advisers’, to help the Syriza government implement reforms that will not be easy.

Only by changing completely the program—and the discourse justifying it—can Greece stay the course, and succeed.  Greece has suffered enough, and should be given another chance to prove that it can succeed—with a program that has a realistic chance of succeeding.  This is the new message that Eurozone leaders should now agree on, and convey to their constituencies.

See A Finance Minister Fit for a Greek Tragedy? in Sunday’s New York Times.

British Journal of Politics and International Relations Prize

I was awarded a prize for best paper published in BJPIR (the British Journal of Politics and International Relations) 2013, for my paper entitled, “Speaking to the Markets or to the People? A Discursive Institutionalist Analysis of the EU’s Sovereign Debt Crisis.”   The prize was announced at the Political Studies Association Annual International Conference, at the conference dinner on the evening of March 31st, 2015 in Sheffield, UK.

The paper argues that the EU’s sovereign debt crisis is not just economic; it is also political, resulting from the failure of EU leaders to offer solutions that calm the markets and convince the people. These failures stem from problems with EU leaders’ ideas about how to solve the crisis as well as their communication about them. That communication encompasses not just EU leaders talking to one another in negotiations of crisis solutions but also speaking to “the markets’ and to ‘the people’ about those solutions, all of which may interact in perverse ways. My article uses the analytic framework of “discursive institutionalism” to consider the different forms, types, levels, rates and mechanisms of change in ideas followed by the EU leaders’ discursive interactions in the “coordinative” discourse and their “communicative discourse” to the global markets and European publics. It uses a range of country cases, but in particular Germany and France, in illustration.

Democracy in Europe named one of One Hundred Books on Europe to Remember

Democracy_in_EuropeVivien Schmidt’s 2006 book, Democracy in Europe (Oxford University Press) has been included in a comprehensive selection of 100 Books on Europe to Remember. The list includes academic, intellectual and political works on the European idea and the development of the European integration process, taking into account the vast geographical, linguistic and intellectual spectrum of ideas. It was compiled by the European Parliamentary Research Service in order to encourage exploration of the ideas and individuals that have inspired and guided the creation and growth of the European Union.

A special celebration to discuss the books and pamphlets that have made a significant contribution to the understanding of European integration was held on March 3 in the European Parliamentary Research Service library reading room. Participants included Joseph Weiler, Kevin Featherstone, Beatrice Taulegne, and Luuk van Middelaar. Martin Shulz, President of the European Commission, introduced the event.

 

Vivien Schmidt and Cornel Ban key researchers in EU Commission funded grant

Vivien Schmidt and Cornel Ban have become key researchers in the EU Commission funded grant: HORIZON 2020 ­ ENLIGHTEN ­ 2015-2018: European Legitimacy in Governing through Hard Times: The Role of European Networks.

ENLIGHTEN is a collaborative project coordinated at the Copenhagen Business School (CBS). In addition to BU professors Schmidt and Ban, the project brings together researchers from CBS as well as the University of Amsterdam, the Central European University and Université Libre de Bruxelles and non-academic partners Tax Justice Network, European Trade Union Confederation, Finance Watch and Housing Europe. The PI of the ENLIGHTEN project is Professor Leonard Seabrooke, Department of Business and Politics, CBS.

ENLIGHTEN addresses the ways in which the EU’s modes of governance cope with hard times on short-term and long-term issues. To do so it investigates the European governance architecture which includes: modes of governance; expert networks; policy instruments; and legitimising narratives. The ENLIGHTEN project suggests that an understanding of temporal issues is crucial to dealing with hard times and for the legitimacy of the European project overall. It distinguishes between Europe’s “fast-burning” and “slow-burning” crises, setting out to compare the ways in which EU policy actors have attempted to deal with them. The project maps how European institutions and expert networks handle these crises, and what European modes of governance relate are suited to addressing these crises.

ENLIGHTEN applies this approach to the study of a range of policy fields that are widely accepted as being critical to both the sustainability of Europe’s continent-wide coordinated governance architecture and the responsiveness of Europe’s democratic polity. The three policy fields
specifically addressed are: (1) Banking Crisis and Fiscal Sustainability; (2) Deficit Reduction and Continuity of Public Services; and (3) Youth Employment and Inclusive Growth. Prof. Schmidt will focus on the theoretical issues surrounding legitimacy and EU institutional actors. Prof. Ban will focus on questions related to the Banking Crisis and Fiscal Sustainability, as well as expert networks linked to EU institutional actors.

Comment on Chancellor Merkel’s Austerity Policy on German TV News (ARD)

Please see the link below to my appearance on German TV news (ARD) in which I was asked to comment on Chancellor Merkel’s austerity policy.

http://www.tagesschau.de/bab-3157~_bab-sendung-175.html

Saving Social Europe: Going Beyond The EU’s “Governing By The Rules And Ruling By The Numbers”

Please see my recent op-ed for Social Europe Journal“Saving Social Europe: Going Beyond Governing by the Rules and Ruling by the Numbers” – on the continued travails of the Eurozone crisis, with suggestions on how to move beyond the austerity policies enacted since 2008 that have wreaked havoc on European social policies, in particular in countries in the periphery.

During the euro’s sovereign debt crisis, European leaders have been obsessed with rules, numbers, and pacts, including the so-called ‘Six-Pack,’ the ‘Two-Pack,’ and the ‘Fiscal Compact,’ each more stringent on the nature of the rules, more restrictive with regard to the numbers, and more punitive for member-states that failed to meet the requirements. In the absence of any deeper political or economic integration, the EU ended up with ‘governing by the rules’ and ‘ruling by the numbers’ in the Eurozone. Austerity policies focused on rapid deficit reduction along with pressures for structural reform – often shorthand for reducing labor rights and protections – have wreaked havoc on ‘Social Europe,’ in particular in countries in the periphery.

Slowly but surely, however, under pressure from deteriorating economies and increasing political volatility, EU leaders have been changing the rules by which they have been governing the economy. But they have not done this formally. Instead, EU leaders have been informally and incrementally reinterpreting the rules without admitting it in their discourse to the public. This has helped to slow the economic crisis but not to end it.

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Presentation on Resilient Liberalism at the United Nations Economic Commission for Latin America and the Caribbean

On October 14, I travelled to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) headquarters in Santiago, Chile, to give a presentation on the “Resilience of neoliberal ideas in Europe and beyond: its causes and its effects on the labor market and the welfare state.” Audio and video of my presentation are available here.

The Beginning of the End or the End of the Beginning for the Stability Rules

The latest skirmish on the budget, as Berlin (and Brussels) try to hold the line on the stability rules, while Paris and Rome push for greater flexibility, is very much a draw.  Hollande and Renzi wanted and needed a very public fight to show their citizens that they have been pressing for less austerity to ensure economic growth, even as they reaffirmed their respect for the rules.  They won by gaining modest concessions that marginally violate the rules on austerity. Merkel also won by ensuring that they too had to make modest concessions toward greater austerity.  This leaves the question:  is this the beginning of the end for the stability rules or is it just the end of the beginning—with wrangling about the rules the new modus operandi? If the latter, Eurozone economies will continue to sink.

Quote appears in the Greek newspaper newspaper Kathimerini on November 6, 2014.

Landscapes of History: Photo Exhibit at Harvard’s Center for European Studies

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Although the reception has already taken place, my photo exhibition remains open for viewing 9 am to 5 pm, Monday through Friday, at the Art Gallery of Harvard’s Center for European Studies, 27 Kirkland Ave, Cambridge Ma 02138.

You can see my other work at http://www.vivienschmidt.com.

Book Discussion of Democracy in Europe: The EU and National Polities online

In a December 2006 discussion on her book, Democracy in Europe: The EU and National Polities, Vivien Schmidt, the Jean Monnet Professor of European Integration at Boston University, offered an explanation of the European Union’s oft-cited “democratic deficit.” In establishing a conceptual framework for her analysis, Schmidt distinguished between two types of governance in European states: simple and compound polities. In simple polities, governing authority is channeled through a single authority while in compound polities it is diffused through multiple authorities. France and the United Kingdom, for example, are simple polities while Germany and Italy are compound. The EU, Schmidt asserted, is a compound polity because it has a composite (national and European) identity and only possesses state-like sovereignty in some policy areas. Trade policy, for example, was cited as an area where shared sovereignty is accepted. When it comes to the Common Foreign and Security Policy, however, this is not the case.

View the discussion on the Woodrow Wilson Center’s YouTube channel.