Q&A: Thomas Piketty responds to surprise Greek election result

Thomas_Piketty_2015In the wake of a surprise re-election of Alexis Tsipras and Syriza, Thomas Piketty, Professor at Paris School of Economics and at EHESS, discusses the need for a more active approach from European leaders when it comes to the Greek question – and for a eurozone parliament to be established.
+++Thomas Piketty will speak at the UCL European Institute on 14 December 2015+++

The Tsipras victory has come as a surprise to some. What has changed for Greece?

Normally, we would expect some stability in the coming years. But above all, Greece and Europe need to make up for lost time. Until now, Europe has obstinately refused to talk seriously about restructuring Greece’s debt. That was what caused the downfall of the last government. Continue reading

Five minutes with Catherine de Vries: “The left is now split over whether they simply oppose the EU’s policies or oppose what the EU stands for overall”

How has opposition to the European Union changed in light of the Greek debt crisis, the UK’s planned referendum on EU membership, and the migration crisis in the Mediterranean? In an interview with LSE EUROPP’s editor Stuart Brown, Catherine de Vries discusses the impact the UK’s referendum might have on the continent, the nature of left-wing Euroscepticism, and why immigration remains the most important issue for David Cameron in his efforts to reach a deal on EU reform.

How might the UK’s referendum campaign affect Eurosceptic movements in other parts of Europe? Could there be a domino effect with other Eurosceptic parties motivated to demand their own referendum on EU membership?

I think this is certainly possible, but it depends on the outcome of the UK’s referendum. I doubt there will be any such referendum prior to the one held in the UK. There were initiatives in the Austrian and Dutch parliaments, but they were voted down. So it really depends: if the UK voted to leave it might well reinvigorate the Eurosceptic right, in particular in countries like the Netherlands and France, but if the referendum is a vote to stay in then it’s unlikely to prompt similar moves elsewhere. Continue reading

Catch-22: Give democracy a chance and keep Greece in the Euro

Ulrike Liebert, Professor in European Studies, looks at the tensions that are arising between the need for effective economic governance in the Eurozone and the need for democratic accountability, both of member states and the EU as a whole, particularly in the context of the outcome of the Greek referendum.

Eurozone leaders sometimes seem to forget that that they are governing an economic and monetary union that is part of the European Union of states and citizens, founded on common values such as ‘respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities’ (Art. 2 TEU).

The Greek population of 11 million represents a minority within the nineteen Eurozone states of some 300 million citizens, a minority which is deeply divided over the burdens which Eurozone rules require them to bear for the sake of the euro’s stability. The referendum of 5 July was an unprecedented instance of a plebiscite on Eurozone bailout conditions, and Eurozone leaders had no choice but to acknowledge it as a legitimate means of democracy. Greek voters turned out in unexpectedly high numbers and forcefully spoke their will.

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Greece, the EU, and the Democratic Conundrum

In this post, Nicola Countouris, Reader at the UCL Faculty of Laws, analyses the reasons why the Greeks may have rejected the creditor institutions’ economic and reform proposals. Arguing that frustration is not the only explanation for Tsipras’  win at the ballot box, and recognising the daunting challenge that lie ahead of the 19 Eurozone democracies, he argues that Europe’s constitutional envelope can be spacious enough to accommodate different versions of democratic economic and human aspirations.

For the second time in six months the Greeks have voted for a political project (which many have and will continue to describe as a ‘political adventure’) that runs against the grain of the unanimous expectations and imperatives of the EU institutions, the IMF, and the bulk of both centre-right and centre-left European governments. Against the odds, against the economic and reform instructions imparted by the lending institutions, and – many will say – against their best interest, the Greeks have refused to conform, and have flatly rejected on two occasions now, the politics of austerity.

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In bad faith

Ashoka Mody, Visiting Professor at Princeton University and former Deputy Director in the IMF’s Research and European Departments, critiques the IMF report published on 2 July, on the eve of Greece’s referendum. This report found that Greek debt was not sustainable and deep debt relief along with substantial new financing was needed to stabilize Greece. This report, according to Mody, reveals that the creditors negotiated with Greece in bad faith. He suggests that the Greek debt burden is much greater than portrayed by the report, and that the policy measures proposed to reduce that burden, including more austerity, will make matters worse. This article was first published on bruegel.

On 2 July, the IMF released its analysis of whether Greek debt was sustainable or not.  The report said that Greek debt was not sustainable and deep debt relief along with substantial new financing were needed to stabilize Greece. In reaching this new assessment, the IMF stated it had learned many lessons. Among them: Greeks would not take adequate structural reforms to spur growth, they would not sell enough of their assets to repay their debt, and they were unable to undertake sufficient fiscal austerity. That left no choice but to grant Greece greater debt relief and to provide new financing to tide Greece over till it could stand on its own feet. The relief, the IMF, says must be provided by European creditors while the IMF is repaid in whole.

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