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1. The Greek Economy a Decade Later – Constantinos Michalopoulos

Author:
Constantine Michalopoulos
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The Greek economy has made a remarkable comeback from a decade ago, to the point that the Economist rated it to have performed the best in the OECD in 2023. This paper reviews Greek economic performance over the last ten years and identifies a number of major challenges that remain, despite the progress made. The last part presents an action plan for the next decade in four priority areas: the labor market, social services, migration and savings-investment. In these areas, reforms are urgently needed, if Greece is to achieve sustainable and equitable growth. The analysis concludes that, because of the continued debt burden, successful reforms will require the Greek government to maintain a delicate and difficult balance between fiscal sustainability and taking the necessary measures to support green and inclusive growth.
Topic:
Reform, Economy, Fiscal Policy, Labor Market, and Economic Crisis
Political Geography:
Europe and Greece

2. Household Wealth Inequalities in the wake of the Greek Debt Crisis

Author:
Apostolos Fasianos
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Despite the renowned interest in wealth disparities, the distribution of wealth in Greece is largely understudied. This study maps the levels, dynamics, and composition of household wealth using data from the three waves of the Household Finance and Consumption Survey for Greece for the period after the debt crisis of 2009-10 till 2017. The evidence suggests that the richest 1% of the population holds roughly as much wealth as the poorest 50%, while the richest 10% holds about four times the wealth of the poorest 50%. Most inequality indicators employed indicate increasing trends in wealth disparities between 2009 and 2017. During this period, average and median wealth holdings decreased by about one third, and the share of financially fragile households increased by about 20%. Estimates from factor inequality decompositions suggest that, although relatively evenly distributed, housing asset holdings explain much of the increase in overall wealth inequality in Greece, followed by self-employment business equity; financial assets play a negligible role. Financial wealth inequality is much more pronounced than housing wealth inequality in Greece. The findings of the paper carry important implications for the design of appropriate policies aiming at reducing wealth inequalities and strengthening financial resilience.
Topic:
Debt, Income Inequality, Economic Crisis, and Wealth
Political Geography:
Europe and Greece

3. 70 years on, it's time to reinvent the ECSC

Author:
Thierry Lepercq
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
Upset between Berlin, Brussels and La Coruña On 16 May 2022, in the Radialsystem conference centre in Berlin, a chair remained forlornly empty. The German Minister for Education and Research, Bettina Stark-Watzinger, inaugurated the conference "Green Hydrogen for a Sustainable European Future" promoted by the German government, before handing over to her Italian counterpart, Cristina Messa, and then to European Commissioner Mariya Gabriel. The empty chair was that of the French Presidency of the European Union which, despite strenuous effort on the part of the German government, did not wish to delegate a representative. In the Chancellery, the mood was one of great tension. Nearly 100 executives representing 31 gas transmission and storage operators (TSOs) from 28 European countries met with the European Commission on 7 June 2022 in Brussels. It was time to present the latest version of the European Hydrogen Backbone (EHB), an initiative launched two years ago by the German company OGE. On the agenda was the unveiling of an ambitious plan to build 28,000 km of hydrogen pipelines across the continent by 2030. One point of interest was a dotted line linking Barcelona to Livorno - to connect the Iberian Peninsula to the rest of Europe, bypassing France, whose opposition to cross-border green hydrogen infrastructure is no longer a mystery. A few months later, on 5 October 2022 in La Coruña, Pedro Sanchez, president of the Spanish government, hosted German Chancellor Olaf Scholz, together with some fifteen ministers. On the agenda of this summit: the European energy crisis and the measures that must be taken to strengthen the continent's supply security and European solidarity. One proposal stood out: to strengthen gas interconnections to allow liquefied natural gas (LNG) arriving in Spanish ports to relieve a German industry that is on the verge of suffocating - and to pave the way for the implementation of green hydrogen transport infrastructures (EHB).
Topic:
Energy Policy, Gas, Investment, Economic Crisis, European Commission, and Energy Crisis
Political Geography:
Europe, Germany, and Spain

4. World food crisis: between withdrawal and responsibility, Europe must choose

Author:
Emmanuelle Ducros
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The profound destructuring of world food markets as a result of Russia's war on Ukraine is forcing all of the world's agricultural powers to question their place on the world stage of satiety - or hunger. This is primarily the case in Europe.
Topic:
Food, Hunger, Armed Conflict, and Economic Crisis
Political Geography:
Russia, Europe, and Ukraine

5. Economic crisis in the Middle East and North Africa

Author:
Marek Dabrowski and Marta Dominguez-Jimenez
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
In the 2010s, the economic situation in the Middle East and North Africa (MENA) deteriorated as a result of lower oil and other commodity prices, a new round of domestic political instability, continuous intra-regional conflicts, stalled economic and governance reforms and, finally, the COVID-19 pandemic. The growth of real GDP, which slowed after the global financial crisis of 2008-2009, further decelerated in the second half of the 2010s and became negative in 2020 as result of the COVID-19 shock. Fiscal balances have deteriorated, even in the oil-exporting countries, and public debt has grown rapidly. MENA countries continue to face numerous long-term socio-economic and institutional challenges including high unemployment (especially youth unemployment), low female labour-market participation rates, the poor quality of education, costly and ineffective public sectors, high military and security spending, high energy subsidies and trade protectionism. Only comprehensive long-term reform programmes can address these challenges. The European Union is MENA’s second largest trading partner after the region itself, and is one of two main sources of foreign direct investment and a major aid donor. However, given the critical importance of the MENA region to its own security and stability, the EU’s engagement in conflict resolution and in supporting economic and political transformation of the region is insufficient and should be intensified. The EU should also update and upgrade its existing association agreements with the countries of the Southern and Eastern Mediterranean, including their free trade provisions.
Topic:
International Trade and Finance, Governance, European Union, Trade, COVID-19, and Economic Crisis
Political Geography:
Europe, Middle East, and North Africa

6. Emigration and Fiscal Austerity in the Greek Depression

Author:
Eugenia Vella
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
What is the role of emigration in a deep recession when the government implements fiscal consolidation? Our macroeconomic model simulations show that fiscal austerity accounts for 1/3 of the output drop in the Greek Depression and more than 10% of migration outflows. In a no-emigration counterfactual scenario, the model predicts a smaller output fall by 20%. We also uncover a novel bi-directional link between emigration and austerity. On the one hand, labour income tax hikes induce prolonged migration outflows, while spending cuts exert a smaller effect. On the other hand, emigration increases the required tax hike and time to meet a given debt target due to endogenous revenue leakage. In terms of unemployment, temporary gains from emigration are reversed over time.
Topic:
Austerity, Fiscal Policy, Emigration, and Economic Crisis
Political Geography:
Europe and Greece

7. Greek Diaspora in an uncertain world

Author:
Othon Anastasakis and Antonis Kamaras
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Greece’s fiscal crisis has energized its relationship with its diaspora in the last several years, after decades of decline, as well as reshaping the diaspora itself due to the massive crisis-driven migration. Research institutes as well as individual scholars have addressed key aspects of the diaspora and homeland relationship prior to and during the crisis. South East European Studies at Oxford (SEESOX) established in 2015 the Greek Diaspora Project, a dedicated research unit which has applied the well-established diaspora and development literature to the Greek case, in the crisis and post-crisis years. The opportunities for synergistic research between University centers and think tanks located in Greece and abroad, in satisfactorily addressing this crisis-driven transformation of the diaspora & homeland relationship, are compelling. SEESOX and ELIAMEP have thus decided to collaborate so they can catalyse such synergies both between themselves and with universities in Greece and abroad. SEESOX’s and ELIAMEP’s joint endeavor will be resolutely comparative as well as cross-disciplinary, reflecting both the requirements of a highly advanced diaspora studies prospectus as well as the respective strengths of the two partners.
Topic:
Migration, Diaspora, and Economic Crisis
Political Geography:
Europe and Greece

8. The International Monetary Fund’s Role in Overcoming Economic Crisis in PIIGS

Author:
Kinga Jasiak
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
Polish Political Science Yearbook
Institution:
Polish Political Science Association (PPSA)
Abstract:
The financial crisis started in 2008 and touched the whole world but some countries experienced its consequences more than others. The European Union and in particular eurozone, slid into a stage of economic recession. Five of 28 EU countries faced the edge of financial fall, named PIIGS-Portugal, Italy, Ireland, Greece and Spain. Multidimensionality of the global crisis have caused that international economic organizations faced a great challenge, For them it was a test of efficiency and effectiveness. The leading role in this period belonged to the International Monetary Fund (IMF), which is standing on the guard of the whole international currency system. The aim of the article is to draw and analyze the most important IMF activities towards PIIGS, especially what instruments were proposed as a help and what changes had to be made by receiving states in order to receive the financial support. The ten-year perspective taken in the article allows for the more comprehensive assessment of the issue.
Topic:
International Cooperation, Financial Crisis, European Union, and Economic Crisis
Political Geography:
Europe

9. Causes and Consequences of the Recent European Crisis: Can Polanyi help us understand problems of the Eurozone?

Author:
Mine Kara
Publication Date:
07-2014
Content Type:
Journal Article
Journal:
All Azimuth: A Journal of Foreign Policy and Peace
Institution:
Center for Foreign Policy and Peace Research
Abstract:
By evoking economic turmoil in Europe, the global crisis of 2007-2008 had important impacts on the economic and political integration of the European Union (EU), leading to a reassessment of the relationship between the core– periphery countries and the model of the ‘democratic European welfare state.’ Most studies that address this problem in the EU focus on the fiscal mismanagement and welfare policies of the non-core or periphery countries (i.e. Greece) as the main culprit. Unlike the mainstream ideas, this paper explains the recent European crisis as a result of the liberalization and deregulation process that started with the second globalization wave in the 1970s. This paper also questions whether the recent radical nationalist trend in the EU countries can be explained as a byproduct of the crisis, using Polanyi’s notion of “double movement”.
Topic:
Globalization, European Union, Eurozone, and Economic Crisis
Political Geography:
Europe

10. Post-Crisis Lesson for EMU Governance from the Principal-Agent Approach

Author:
Grzegorz Poniatowski and Luca Barbone
Publication Date:
07-2013
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper contributes to the ongoing debate on fiscal consolidation and the questionable effectiveness of the Stability and Growth Pact by addressing the problem of economic governance in the EMU with a game-theoretic principal-agent approach. Following the theory of delegation, we develop a principal-multi agent model where the EMU authorities act as a collective principal that designs contracts for each of two agents that reflect Europe’s ”South” and ”North”. We investigate what happens when agents face hidden-information moral hazard problem and when they are able to coordinate their actions. Bearing in mind the applicability of incentive mechanisms, we discuss the optimal contracts for the principal and each of the agents. We prove that the most efficient solution consists of tailor-made contracts, according to which highly indebted countries must be offered strong incentive mechanisms in the form of substantial penalties but also rewards (e.g., preferential loans). We also stress the importance of taking into account positive spillover effects, which could be facilitated by economic integration and fiscal policy coordination between the EMU Members.
Topic:
Governance, Macroeconomics, and Economic Crisis
Political Geography:
Europe