Greece joined the European Economic Community (EEC) in 1981, however the economic crisis experienced by the country since 2010 has led some commentators and politicians to argue that Greece was granted accession prematurely. Eirini Karamouzi writes that while there were legitimate objections to the country being granted membership at the time, it was a broadly sound decision given the historical context in which negotiations took place.
The financial and economic crises that gripped Greece in 2010 set in motion a domino effect that rattled the rest of the Eurozone. It also opened the floodgates to a seemingly endless stream of accusations, as the contemporary press and European political elites engaged in an often myopic blame game over the origins of the crisis. As Greek financial woes polarised opinion, former French president Valéry Giscard d’Estaing, remembered among other things for the instrumental role he played in welcoming Greece to the European Economic Community (EEC) in 1981, admitted that supporting Greek membership had been a mistake. Continue reading
Economic and financial changes since the onset of the global and euro area crises
By Eleni Louri-Dendrinou
With the introduction of the euro and the mispricing of sovereign (Greek) risk, a flux of funding inundated Greece and helped fuel an impressive growth rate (averaging 4%) in 2000-2008. Growth, combined with low inflation since monetary policy was managed by the European Central Bank (ECB), produced a flattering picture of an economy suffering from serious reform resistance. Growing fiscal and external imbalances were thus left unaddressed. In 2009 the fiscal deficit reached 15%, while Greece’s competitiveness loss against its trading partners in 2000-2008 was 30%, leading to a current account deficit exceeding 15%. The government sector was crowding-out the tradeables sector.
By Theodore Panagiotidis & Panagiotis Printzis
Housing is considered to be the most valuable asset of a household and of fundamental importance for its portfolio. Economics considers housing differently as expenditure on new housing is regarded as investment. There is an extensive literature that focuses on the interaction between the housing market and macroeconomic factors. The recent US subprime crisis, the subsequent collapse of the housing market, the financial crisis and its spill-over effects renewed the focus on the importance of the housing market. The scientific literature focuses on both homeownership and the housing wealth. Homeownership varies across countries and its benefits and costs are under examination. Figure 1 presents homeownership rates for the US, Australia, Mexico, Canada and various EU countries. A degree of differentiation can be observed. Spain, Ireland and Greece are characterized by a relatively higher degree of home ownership. On the other side, housing wealth is defined as the market value of all the assets or capital stock of the residential sector in a country (rented or owned). A number of studies have shown that a positive effect of housing wealth on consumption exists, termed the “housing wealth effect”. Others argue that the latter is overestimated. Continue reading
By Nikolaos Zahariadis
Crises are both risks and opportunities. They create uncertainty and ambiguity not only because they tend to bring about change but also because they simultaneously point to different directions of policy. Politicians are torn between two opposing forces. They face the challenge of urgently needing to respond to the exigencies of the moment while being tempted by the opportunity to implement long awaited reforms. Response is defined as the short-term effort – e.g., tax increases and spending reductions – to return things back to “normal.” Reform makes deep, structural changes in policies – e.g., tax collection and public employment – to bring about a new “normal.” There are incentives to move in both directions at once which are periodically updated by elections. However, quite often politicians end up using crisis rhetoric to undermine reforms and return back to the same policies that caused the crisis in the first place. Following the Euro-elections, the Greek government of Antonis Samaras appears to be heading in precisely this direction. Continue reading
By James Ker-Lindsay
Sunday’s European Parliament elections in Cyprus, the third set of elections since the island joined the EU in 2004, yielded few surprises. As expected, the governing right-wing DISY, which is aligned with the European People’s Party (EPP) topped the results and returned two MEPs. In second place was the Cyprus communist party, AKEL, which is aligned to the European United Left (GUE-NDL), also elected two MEPs. The last two of the island’s six seats were allocated to the centre-right DIKO and centre-left EDEK; both of which are, somewhat confusingly, aligned to the Socialists and Democrats (S&D). Therefore, despite the fact that four of the six MEPs are new faces, the overall party allocation of seats remains the same as the last parliament. Continue reading
European Parliament elections are being held on 22-25 May 2014, with voting already under way in some countries across Europe. Our staff (teaming up with EUROPP Blog and South East Europe @ LSE) gives a final look at the national campaigns for each of the South Eastern European countries, highlighting the national polling and the key domestic issues.
By Dr Spyros Economides
This article was originally published on The Conversation. Read the original article.
The Greek public will go to the polls on May 25 as a massively divided electorate. The obvious factor which shapes public opinion is the continuation of an economic crisis which has resulted in a six-year recession and ongoing austerity programme which has led to a massive contraction in the Greek economy and dramatic falls in levels of income and standards of living. Continue reading
by Rebekka Christopoulou and Vassilis Monastiriotis *
It is well known that in the last five years Greek wages have collapsed both in the public and in the private sector. What is perhaps less known, owing in part to the attention of much of the policy debate on the cuts in the public sector, is that the wage adjustment in the two sectors has been equally deep. In fact, the private sector experienced if anything more radical changes in its pay-structure, with elements of increasing commodification, while the public sector continues to offer advantageous wages to privileged groups, despite the policy focus on the “rationalization” of pay in the sector. Continue reading
by Professor Kevin Featherstone
A week ago, Greece had some of its best headlines in the international media since before the crisis began. The quick and decisive actions against Chrysi Avghi showed the strength of the democratic spirit. This was a fight-back against a Neo-Nazi force at a time when the extreme right was making inroads into the stagnant politics of other European societies. I felt proud of Greece when explaining these actions to my friends in London. Continue reading
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