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Begin New Search Topic Financial Crisis Political Geography Europe

1. Beyond Coronabonds: A New Constituent for Europe

Author:
Nicoletta Pirozzi
Publication Date:
04-2020
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
Every era has its symbols. In 1984, Mitterrand and Kohl held hands on the battlefield in Verdun, coming to symbolise the importance of peace in the pursuit of European integration. Today, in times of COVID-19, the so-called “Coronabonds” could have emerged as the symbol of a new Europe, one that is ready and able to do what it takes to collectively overcome the present crisis. Yet, what some member states consider an indispensable emblem of European solidarity, namely debt mutualisation to face an unprecedented symmetric crisis brought about by COVID-19, is regarded by others as an ultimate excuse for moral hazard. As a result, Europe could end up with a politically more digestible European Fund, as proposed by Commissioners Paolo Gentiloni and Thierry Breton, designed to issue long-term bonds.[1] Or, as outlined by the Eurogroup, a Recovery Fund that is “temporary, targeted and commensurate” to the extraordinary costs of the current crisis, helping to spread them across time.
Topic:
Financial Crisis, Governance, Finance, Economy, and Coronavirus
Political Geography:
Europe and European Union

2. Causal Mechanism and Explanation in Social Science

Author:
Renate Mayntz
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
In the social sciences, the development of a specific social event or structure is often ex- plained by a statistical correlation between an independent variable and a variable assumed to be dependent upon it. This mode of explanation is contested by a methodology of causal reconstruction that operates with the concept of mechanisms. A mechanism is a process in which a set of linked steps leads from initial conditions to an outcome or effect. Mechanisms are general concepts, subjecting individual cases to a general category. Except for the litera- ture dealing specifically with the concept, the term “mechanism” is often used without defi- nition of its substantive content; there is no agreement with respect to the unique or plural character of the initial conditions, nor to the structure of the causal path leading to a specific outcome. Nevertheless, mechanisms have played a crucial role in detailed causal analysis of complex historical events, such as the financial crisis of 2008 and German unification of 1989.
Topic:
Cold War, Nationalism, Financial Crisis, and Unification
Political Geography:
Europe, Germany, West Germany, Central Europe, and East Germany

3. Bank recapitalizations in Greece: From state-led bailouts to the ownership transfer of banks to foreign hands

Author:
Athanasios Kolliopoulos
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
A decade after the conclusion of the first economic adjustment programme in 2010 and despite three consecutive recapitalizations, Greek banks still suffer from the highest Non-Performing Loans ratio in the Eurozone, with credit expansion in the “real economy” remaining anemic. Furthermore, the overall impact on public debt from government financial support to Greek banks over the last decade was one of the largest among the Eurozone countries. What went wrong? What were the reasons that the domestic financial system ended up in this exceptionally sad state? Why did the recapitalization policy not have the desired outcome? Exploring these questions throughout the literature of responses to banking crises, this paper shows that recapitalization policy in Greece failed to exploit the advantages of the principal forms of bank rescues. In fact, the significant inertia prevailing among authorities and bankers throughout the recapitalizations brought about the ownership transfer of the Greek banking system to foreign hands (“dehellenization”) after the third recapitalization in late 2015. You may acces the full paper by Dr. Athanasios Kolliopoulos, Postdoctoral Researcher at the Athens University of Economics and Business, here.
Topic:
Financial Crisis, Banks, Recapitalizations, Bailout, and Banking Crisis
Political Geography:
Europe and Greece

4. It’s Time for a New Deal

Author:
Constantine Michalopoulos
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The prospects of the Greek economy are mostly good with growth continuing for the fourth straight year. But there is a sense of disappointment, as the recovery has not been very strong and pre-crisis income levels will not be regained for another decade. There are two main reasons for the sluggish recovery: The European creditors have imposed on Greece the requirement to run a primary budget surplus of 3.5% of GDP for five years to ensure that they get repaid—a requirement that constricts growth of the Greek private sector—through heavy taxation of consumers and business. And domestic investment is sluggish, although there are plenty of unutilized resources, such as those provided by the European Structural Funds. There is a need for a new deal with the European Institutions: the Europeans should be more relaxed about getting repaid because of Greece’s much improved access to the European capital markets and be willing to accept a Greek government commitment to a significantly lower primary budget surplus for the next several years. In exchange the Greek government should commit to a commensurate increase in domestic investment through reforms of the banking sector as well as greater public sector investment spending.
Topic:
Government, Financial Crisis, Economy, Economic growth, and Public Spending
Political Geography:
Europe and Greece

5. The economic impact of COVID-19 on the EU: From the frying pan into the fire

Author:
Fabian Zuleeg
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
European Policy Centre
Abstract:
The world is facing an unprecedented economic crisis due to the ongoing COVID-19 pandemic. At a time when the first instinct is to focus on the national level and greater sovereignty and self-reliance, the best strategy to answer the crisis lies in greater cooperation. Fabian Zuleeg analyses the onset of this crisis and provides sound predictions of future economic impacts by applying lessons from previous recessions.
Topic:
Financial Crisis, Economy, and COVID-19
Political Geography:
Europe

6. Evolve or Perish: The Global Forces Changing the Business of Banks

Author:
Robert Fay and Angelo Arcelli
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Following the 2008 financial crisis, the Group of Twenty embarked on an ambitious financial regulatory reform plan that has seen many banks worldwide make substantial progress in terms of both capitalization and governance. Over this period, banks have also become increasingly exposed to business risks from digitization, artificial intelligence and cybercrime, and major investments are necessary to manage these risks. New regulations have been introduced in the European Union to reduce these risks, but their associated costs have potentially created a lasting competitive disadvantage for European banks. This situation has raised some key questions that deserve to be discussed and investigated: How does regulation — including that outside the sector — affect banks’ ability to compete globally? What will be the impact of fintech players as well as globally active banks from China and other emerging markets? Can the Basel regulatory framework and Financial Stability Board (FSB) ensure a level playing field globally going forward, or has the regulatory pendulum swung too far? How will the supervisory approach need to be adapted to the changing structure of the global financial system? Moreover, how will the implementation of Basel reforms affect the industry? These and other questions remain about the effectiveness of the already-achieved reforms as well as their future direction. These issues were at the core of CIGI and Oliver Wyman’s fifth annual Financial Regulatory Outlook Conference, held in Rome on November 28, 2018. This conference report summarizes the key points of discussions at the conference, with a special focus on the 10 years of regulatory reform that was conducted under the auspices of the FSB and the new forces that are currently affecting banks and could have an impact on the future.
Topic:
Financial Crisis, Regulation, Europe Union, and digital culture
Political Geography:
Europe and Global Focus

7. Consolidating Neoliberalism through Privatisation: The Case of the EU after the Eurozone Crisis

Author:
Özgün Sarimehmet Duman
Publication Date:
09-2019
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
This article offers an inquiry into the increasing importance of privatisation policies in the European Union (EU). It evaluates the emphasis on international competitiveness and market efficiency to offer a comparative analysis of commodification, marketisation, liberalisation and privatisation policies in the pre- and post-crisis EU. It states that the EU introduced new mechanisms to explicitly promote privatisation policies in its member states after the Eurozone crisis. The article concludes that the EU’s lead in privatisation has functioned as a disciplinary mechanism for the member states to introduce and implement extensive privatisation policies. The EU has tended to consolidate neoliberalism through privatisation after the Eurozone crisis.
Topic:
Economics, Privatization, Financial Crisis, European Union, and Neoliberalism
Political Geography:
Europe

8. Euro-area Governance Reform: The Unfinished Agenda

Author:
Miranda Xafa
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Since the debt crisis of 2010-2012, sustained efforts toward deeper integration, supported by accommodative monetary policy, helped promote the recovery of the euro-area economy and dispelled fears of a breakup of the single currency. Fiscal rules were tightened and macro surveillance tools were set up for crisis prevention. Yet significant challenges remain to be tackled. Gaps remain in the euro-area architecture; limited progress has been made in establishing the Capital Markets Union and the banking union remains incomplete. Today’s environment of solid growth remains an ideal time to advance the reform agenda. There is wide agreement that building a well-functioning and resilient monetary union in Europe requires further steps to break the bank-sovereign doom loop and to increase risk sharing among members of the union. Many competing proposals have been tabled to make the governance of the euro area more robust. Views differ on the shape and sequencing of reforms, and on the degree of integration that is ultimately desirable, with some observers arguing for a full fiscal union with shared risk, and others going all the way to full political union through the creation of a federal state. This paper assesses and prioritizes key proposals that are economically sound and politically feasible.
Topic:
Debt, Regional Cooperation, Financial Crisis, and European Union
Political Geography:
Europe

9. When the Greek Political System Clashed with Europe: Why the Greek Sovereign-Debt Crisis is Taking so Long to End

Author:
Constantine A. Papadopoulos
Publication Date:
10-2018
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
The central argument of this essay is that, in order to understand the reasons behind the Greek economy’s inability to recover sooner from its 8-year recession, analysis must focus on the institutional, political and cultural traits of the country rather than take a primarily “economistic” approach and simply blame “excessive austerity” and/or the euro. In fact, it will be argued that Greece’s positive performance under the euro (until government actions derailed the economy) is generally underappreciated, suggesting that if the country’s institutional weaknesses are addressed, the economy will grow. If they are not, the country’s long-term economic potential will almost certainly remain unfulfilled.
Topic:
Debt, Economics, Financial Crisis, Reform, Global Financial Crisis, and Austerity
Political Geography:
Europe and Greece

10. Potential impact of financial innovation on financial services and monetary policy

Author:
Marek Dabrowski
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
Topic:
Energy Policy, Environment, Monetary Policy, Financial Crisis, Economic growth, Innovation, and Trade
Political Geography:
Europe, Global Focus, and European Union