Two of the currently most popular hashtags on Twitter reflect Britain’s debate on whether to leave the EU (#Brexit) and the possibility of Greece leaving the euro (#Grexit). But although they differ only by their first letter, those two topics are by no means the same. In this post, Filipa Figueira, Teaching Fellow in Economics at UCL, explores how the two are nonetheless closely linked and how addressing one may help resolve the other.
A decision on being part of the European Union is very different from a decision on being part of a common currency. Although the word ‘euro’ makes the common currency sound like a core aspect of ‘Europeanness’, it is in fact only one of the EU’s many policies. And, as the British example shows, it is perfectly possible to be an EU member without participating in the euro currency.
Yet confusion reigns. When, in early July, a Greek exit of the euro seemed possible, many jumped to the conclusion that the country would need to leave the European Union too. This included, for example, the President of the European Parliament Martin Schulz – who really should know better, as that would of course not have been the case.
Joseph Stiglitz’s influential call on the Greeks to vote ‘no’ in Sunday’s referendum has received attention from all corners of the globe. In this response, Kira Gartzou-Katsouyanni and Philip Schnattinger, critically analyse Stiglitz’s arguments and put forward an argument for a ‘yes’ vote.
Joseph Stiglitz’s call on the Greeks to vote ‘no’ in Sunday’s referendum has received broad international publicity and has given an enormous boost to the ‘no’ campaign in Greece. Yet many of his arguments about both economics and politics are at best one-sided.
Stiglitz talks a lot about the Eurozone’s democratic flaws. Indeed, many of us have participated in discussions about the European Union’s democratic deficit in the past, and there is no doubt that there are ways in which the Eurozone’s democratic credentials can be improved.
But the Eurogroup’s decision not to extend the economic adjustment programme beyond its expiry date was not an example of anti-democratic behaviour by European technocrats. On 20 February, the Greek government agreed to the extension of the programme which was due to expire on 30 June. It has been publically known for five months that without another agreement by the end of June, Europe’s money to Greece would run out. We all knew that this would include the end of the ECB’s emergency liquidity programme, which had already been increased in size several times to keep the Greek banking sector afloat.
Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, was Chairman of President Bill Clinton’s Council of Economic Advisers and served as Senior Vice President and Chief Economist of the World Bank. In this commentary, he describes the true nature of the ongoing debt dispute as being about power and democracy much more than money and economics—and takes a stance on how he would vote in the Greek referendum. This post was first published by Project Syndicate.
The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.
Media coverage of the talks between Greece and its Eurozone partners sounds increasingly alarming, but there is no need to run for cover. Filipa Figueira explains why we don’t need to panic about Greece.
The past few months have seen a series of make-or-break meetings between Greece and the other Eurozone countries – culminating on 24 April with a tempestuous Eurogroup meeting in Latvia. There, finance ministers allegedly accused Greek Finance Minister Yannis Varoufakis of being ‘a gambler, a time-waster and an amateur’, and blocked their ears while he was speaking to show their despair. This led Prime Minister Alexis Tsipras to reshuffle the negotiating team – Mr Varoufakis has not been fired, but was sidelined, as Deputy Foreign Minister Euclid Tsakalotos will now be heading the negotiations with the Eurogroup.
So are we approaching ‘Grexit’? Most probably not.