It should consist of three elements: the Greek debt stock, the short-term fiscal stance, and structural economic reform issues.
For Tsipras, the trick will be to make concessions but sell the deal to the Greek people as a dramatic change from the status quo. The euro can thus hold out for 80 to 90 percent of their demands. The paper calls for a more extensive examination by scholars of the financial sector-central bank relationship as a means to clarify the precise scope of, and limitations to, contemporary financial political power.In the confrontation over Greece, Prime Minister Alexis Tsipras is under more pressure than the euro area to make a deal to avert a default or a Greek exit. The paper illustrates how financial actors enjoy systematic advantages in the domain of central bank policymaking and provides significant evidence that the European Central Bank has been a key ally of the financial sector throughout the Eurozone crisis. It does so by identifying four mechanisms through which financial actors potentially influence the policy choices of the European Central Bank – revolving doors, closed policy circles, capital flight/disinvestment, Too Big to Fail – and illustrates their operation empirically in the context of the bank’s organizational functioning and post crisis interventions. As a corrective, this paper develops a provisional analytical framework through which the power dynamics between the financial sector and central banks can be fruitfully explored, specifically with reference to the European Central Bank. This is problematic given the sharp rise in institutional prominence enjoyed by central bank officials in the post crisis era and their fundamental importance in the governance of financial markets. Nevertheless, there remains a dearth in the literature regarding the precise nature of the political relationship between the financial sector and central banks. In the aftermath of the 2008 financial crisis, there has been a major scholarly revival of the topic of financial political power and a refocus on questions concerning democracy, elites, and inequality. The combined-but-not-unified structure ensured that when crisis struck, Greece was isolated, yet still fully part of the EU/EA. Meanwhile, promises of monetary support, such as deposit guarantees and lending of last resort have largely remained the responsibility of nation states. At the supranational level, the removal of barriers to cross-border banking and a common rule book. Drawing on Marxist political economy we examine the financial mechanisms in detail and find a scalar split in state provision of banking infrastructure in the EU/EA.
#Greek private debt writedown full
Why did European banking infrastructure leave the Greek state facing losses and liabilities alone, while still full members of the EU and Euro Area (EA)? We find that European banking infrastructure is combined-but-not-unified, and that integration requires both. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for empirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.īetween 20 Greek banks received capital injections as part of an EU-led rescue package that left the Greek state with large losses on their investments and a debt to repay in the most acute moments of the crisis the European central bank twice forced the Bank of Greece to assume sole responsibility for any losses on lending to Greek banks, and in 2015 Greek banks were subject to EU-mandated controls that restricted the transformation of Greek bank deposits into Euros in other forms. However, without a well-developed concept of corporate welfare-premised upon the key criterion of conditionality-studies that identify a "return" of the state in industrial planning misrepresent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. Corporate welfare-the transfer of public funds and benefits to corporate actors with weak or no conditionality-is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare.
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