Crisis in the Eurozone. Costas Lapavitsas
Чтение книги онлайн.
Читать онлайн книгу Crisis in the Eurozone - Costas Lapavitsas страница 2
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 debt: Domestic financialisation and external flows
10 Rescuing the banks once again
Banks in the eye of the storm
Funding pressures on European banks
The European support package and its aims
The chances of success of the rescue package
11 Society pays the price: Austerity and further liberalisation
The spread of austerity and its likely impact
The periphery takes the brunt of austerity policy
Mission impossible?
12 The spectre of default in Europe
Default, debt renegotiation and exit
Creditor-led default: Reinforcing the straitjacket of the eurozone
Debtor-led default and the feasibility of exit from the eurozone
APPENDIX 2A THE CRISIS LAST TIME: ARGENTINA AND RUSSIA
The Washington Consensus brings collapse to Buenos Aires
Some lessons from Argentina
Russia’s transition from a planned economy: Collapse and recovery
Default is not such a disaster, after all
Appendix 2B Construction of aggregate debt profiles
Greece
Appendix 2C Decomposition of aggregate demand
PART 3: BREAKING UP? A RADICAL ROUTE OUT OF THE EUROZONE CRISIS
13 Hitting the buffers
A global upheaval
The euro: A novel form of international reserve currency
The euro mediates the global crisis in Europe
14 Monetary disunion: Institutional malfunctioning and power relations
The ECB and the limits of liquidity provision
EFSF and ESM fumbling
15 Failing austerity: Class interests and institutional fixes
Virtuous austerity: Hurting without working
Desperately searching for alternatives
16 Centrifugal finance: Re-strengthened links between banks and nation states
The re-strengthening of national financial relations
Greek banks draw closer to the Greek state
17 The social and political significance of breaking up
The context of rupture
Modalities of default
18 Default and exit: Cutting the Gordian knot
Greece defaults but stays in the EMU
Greece defaults and exits the EMU
In lieu of a conclusion
PREFACE
The storm buffeting the common currency of Europe is an integral part of the great crisis that commenced in 2007. Barely five years after bank speculation in the US real estate market had caused international money markets to freeze, three peripheral countries of the eurozone were in receipt of bailout programmes, Greece was on the brink of exiting the monetary union, and the mechanisms of the euro faced breaking pressure.
The causal chain linking US financial market turmoil to European Monetary Union instability has been analysed by several economists, including those authoring the present book. Summarily put, the collapse of Lehman Brothers in 2008 led to a major financial crisis that ushered in a global recession; the result was rising fiscal deficits for several leading countries of the world economy. For countries in the eurozone periphery, already deeply indebted after years of weakening competitiveness relative to the eurozone core, fiscal deficits led to restricted access to international bond markets. Peripheral states were threatened with insolvency, posing a risk to the European banks that were among the major lenders to the periphery. To rescue the banks, the eurozone had to bail out peripheral states. But bailouts were accompanied by austerity that induced deep recessions and rendered it hard to remain in the monetary union, particularly for Greece.
The threat to the euro would perhaps have been understood earlier had more attention been paid to history. In 1929 speculation in the New York Stock Exchange induced a crash that led to global recession; by 1932 it had become necessary to abandon the gold standard that had only been reintroduced in 1926. The recessionary forces in the world economy had grown vast in part because states had been trying to protect gold reserves and associated fixed exchange rates. It became impossible to cling on to the rigid system of metallic world money.
The European Monetary Union, needless to say, is quite different from the gold standard. It is a system of managed money that is free from the blind