Crisis in the Εurozone
C. Lapavitsas, A. Kaltenbrunner, G. Labrinidis, D. Lindo,
J. Meadway, J. Michell, J.P. Painceira, E. Pires, J. Powell,
A. Stenfors, N. Teles, L. Vatikiotis
Introduction by Stathis Kouvelakis
First published by Verso 2012
The collection © Verso 2012
The contributions © The contributors 2012
‘This book is a revised version of three reports on the eurozone crisis published online by Research on Money and Finance, namely Eurozone Crisis: Beggar Thyself and Thy Neighbour, March 2010; The Eurozone Between Austerity and Default, September 2010; and Breaking Up? A Route Out of the Eurozone Crisis, November 2011. The first RMF report also appeared as an article in the Journal of Balkan and Near Eastern Studies, vol. 12, issue 4. The authors would like to thank the journal for permission to republish this material.
All rights reserved
The moral rights of the authors have been asserted
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ISBN-13: 978-1-7816-8041-4
eISBN: 978-1-781-68041-4
British Library Cataloguing in Publication Data
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CONTENTS
Introduction: The End of Europeanism by Stathis Kouvelakis
PART 1 BEGGAR THYSELF AND THY NEIGHBOUR
1 Several dimensions of a public debt crisis
Institutional bias and malfunction in the eurozone
Peripheral countries in the shadow of Germany
The impact of the crisis of 2007–9 and the role of finance
Policy options for peripheral countries
The order of analysis in Part 1
2 Macroeconomic performance: Stagnation in Germany, bubbles in the periphery
Growth, unemployment and inflation
3 Labour remuneration and productivity: A general squeeze, but more effective in Germany
The determinants of German competitive success
Real compensation and the share of labour in output
4 International transactions: Trade and capital flows in the shadow of Germany
Current account: Surplus for Germany, deficits for periphery
Financial account: German FDI and bank lending to the periphery
5 Rising public sector borrowing: Dealing with failed banks and worsening recession
The straitjacket on fiscal policy
Rising public deficits and debt due to the crisis
6 The financial sector: How to create a global crisis and then benefit from it
An institutional framework that favours financial but also productive capital
Banking in the eurozone: The core becomes exposed to the periphery
ECB operations allow banks to restrict their lending
Sovereign debt rises
A hothouse for speculation
7 Political economy of alternative strategies to deal with the crisis
Austerity, or imposing the costs on workers in peripheral countries
Reform of the eurozone: Aiming for a ‘good euro’
Exit from the eurozone: Radical social and economic change
PART 2: THE EUROZONE BETWEEN AUSTERITY AND DEFAULT
8 Introduction
9 A profusion of debt: If you cannot compete, keep borrowing
The magnitude of peripheral debt
The economic roots of external debt
The composition of peripheral