Project

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Distributional Conflicts and the Politics of Adjustment in the Eurozone Crisis

English title Distributional Conflicts and the Politics of Adjustment in the Eurozone Crisis
Applicant Walter Stefanie
Number 156574
Funding scheme Project funding (Div. I-III)
Research institution Institut für Politikwissenschaft Universität Zürich
Institution of higher education University of Zurich - ZH
Main discipline Political science
Start/End 01.01.2015 - 31.07.2019
Approved amount 478'950.00
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Keywords (5)

international political economy; euro crisis; distributional conflict; reforms; crisis politics

Lay Summary (German)

Lead
Die Eurokrise hat sich zur grössten Herausforderung entwickelt, welche die Europäische Union je zu meistern hatte. In der Krise zeigen sich grosse Unterschiede in der Bereitschaft einzelner Länder, durch Reformen im Bereich von Wirtschaftspolitik, Strukturpolitik und innereuropäischen Strukturen sowie Transferzahlungen zu einer nachhaltigen Lösung der Krise beizutragen. Wie können diese Unterschiede erklärt werden?
Lay summary

Das Projekt untersucht, wie die Verwundbarkeiten verschiedener gesellschaftlicher Gruppen bezüglich Austerität und Strukturreformen bzw. einem Auseinanderbrechen der Eurozone auf die Bereitschaft der EWU-Mitgliedstaaten auswirkt, nachhaltig zur Lösung der Eurokrise beizutragen. Aufbauend auf der Erkenntnis, dass es sich bei der Eurokrise im Kern um eine Zahlungsbilanzkrise handelt untersucht das Projekt dazu sowohl die Determinanten der Reformbereitschaft in den Defizitstaaten, als auch die Zahlungsbereitschaft in den Überschussländern. Es argumentiert, dass sich die verteilungspolitischen Konflikte in den Defizit- und Überschussländern der Eurozone unterscheiden, jedoch gleichzeitig fundamental zusammenhängen, so dass sich eine gesamthafte Analyse dieser Zusammenhänge anbietet. Dabei erzeugt eine hohe Verwundbarkeit gegenüber binnenwirtschaftlichen Reformen eine höhere Bereitschaft zu (in Überschussstaaten) bzw. eine höhere Nachfrage nach (in Defizitstaaten) Transferzahlungen an Krisenstaaten. Modul 1 untersucht dazu diesen Zusammenhang zwischen gesellschaftlichen Verwundbarkeitsprofilen und Reform- bzw. Zahlungsbereitschaft auf Länderebene. In den Modulen 2 und 3 wird die Krisenpolitik in jeweils drei Defizit- bzw. Überschussländer vertieft untersucht, wobei die Verwundbarkeiten einzelner Interessengruppen und deren Krisenpolitik im Mittelpunkt der Analyse stehen. Ziel des Projekts ist ein besseres Verständnis über die politisch bedingten Grenzen des Spielraums bei der Suche nach einer nachhaltigen Lösung der Eurokrise. 

 

Direct link to Lay Summary Last update: 19.12.2014

Lay Summary (English)

Lead
The euro crisis has turned into the most serious challenge the European Union has ever had to face. In the crisis, countries have varied considerably in their willingness to implement reforms in terms of national macroeconomic and structural policies and in terms of supranational institutions and in their willingness to financially support crisis countries. How can these differences be explained?
Lay summary

The project analyzes how societies’ vulnerabilities to different types of policy responses to the crisis affects their willingness to engage in policies that constribute to a sustainable solution of the euro  crisis. The argument builds on the insight that the euro crisis is, at its root, a balance-of-payments crisis and argues that the resulting distributive struggles surrounding the politics of the euro crisis in surplus and deficit countries are distinct but related, and should therefore be analyzed in a unified framework. The vulnerability to internal reforms is inversely related to the willingness to support (in surplus countries) or demand (in deficit countries) transfer payments to crisis countries.

Empirically, the project examines how vulnerability profiles affect domestic crisis politics and policies on two levels of analysis, the interest-group and the national level. It uses a mixed-methods research design that combines two sets of qualitative comparative case studies of the domestic politics of the euro crisis in surplus and deficit countries, respectively, with a quantitative analysis of national vulnerability profiles and crisis politics in a wider set of countries. The overarching goal of the project is to generate an encompassing picture of the distributional politics of the euro crisis and a better understanding of the constraints under which European policymakers operate in their attempts to solve the crisis.

 

Direct link to Lay Summary Last update: 19.12.2014

Responsible applicant and co-applicants

Employees

Publications

Publication
The Politics of Stashing Wealth. The Demise of Labor Power and the Global Rise of Corporate Savings'
Redeker Nils (2019), The Politics of Stashing Wealth. The Demise of Labor Power and the Global Rise of Corporate Savings', CIS Working Paper Series, Zurich.
Analyzing inter-state negotiations in the Eurozone crisis and beyond
Frieden Jeffry, Walter Stefanie (2018), Analyzing inter-state negotiations in the Eurozone crisis and beyond, in European Union Politics, 20(1), 134-151.
Understanding the Political Economy of the Eurozone Crisis
Frieden Jeffry, Walter Stefanie (2017), Understanding the Political Economy of the Eurozone Crisis, in Annual Review of Political Science, 20, 371-390.
The Political Economy of the Euro Crisis
Copelovitch Mark, Frieden Jeffry, Walter Stefanie (2016), The Political Economy of the Euro Crisis, in COMPARATIVE POLITICAL STUDIES, 49(7), 811-840.
The Distributive Politics of the Eurozone Crisis
Walter Stefanie (2015), The Distributive Politics of the Eurozone Crisis, in The Political Economist, XI(2), 7-8.

Collaboration

Group / person Country
Types of collaboration
Prof. Jeffry Frieden, Harvard University United States of America (North America)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
- Exchange of personnel
Prof. Mark Copelovitch, University of Wisconsin at Madison United States of America (North America)
- in-depth/constructive exchanges on approaches, methods or results
- Publication

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
Dreiländertagung 2019 Talk given at a conference Fiscal Priorities in Hard Times: Evidence on Interest Group Preference Cleavages in the Eurozone Periphery’ 15.02.2019 Zürich, Switzerland Ray Ari;
International Political Economy Society Conference 2018 Talk given at a conference The Politics of Stashing Wealth – The Demise of Labor Power and the Global Rise of Corporate Saving 02.11.2018 MIT, United States of America Redeker Nils;
Annual Conference of the Midwestern Political Science Association Talk given at a conference We’d rather pay than change The politics of German non-adjustment in the Eurocrisis 07.04.2018 Chicago IL, United States of America Redeker Nils;
Annual Conference of the Midwestern Political Science Association Talk given at a conference The Politics of Stashing Wealth – The Demise of Labor Power and the Global Rise of Corporate Saving" 07.04.2018 Chicago IL, United States of America Redeker Nils;
International Conference of Europeanists Talk given at a conference Measuring Vulnerabilities towards different Crisis Resolution Strategies 30.03.2018 Chicago IL, United States of America Reinke Raphael;
International Conference of Europeanists Talk given at a conference The Politics of Stashing Wealth – The Demise of Labor Power and the Global Rise of Corporate Saving 29.03.2018 Chicago IL, United States of America Redeker Nils;
International Conference of Europeanists Talk given at a conference ‘Altered Risks or Static Divides? Labor Market Inequality in the Eurozone South after the Great Recession’ 29.03.2018 Chicago IL, United States of America Ray Ari;
International Conference of Europeanists Talk given at a conference "We’d rather pay than change The politics of German non-adjustment in the Eurocrisis". 28.03.2018 Chicago IL, United States of America Redeker Nils;
Political Economy of International Institutions Conference 2018 Talk given at a conference Crisis Politics. The Political Economy of Adjustment 10.03.2018 Harvard University, United States of America Walter Stefanie;
Dreiländertagung 2019 Talk given at a conference Non-Adjustment in the Eurocrisis - Interest Groups, Voters, and Crisis Politics 15.02.2018 Zürich, Switzerland Redeker Nils;
Annual Conference oft he Swiss Political Science Association Talk given at a conference The Politics of Stashing Wealth – The Demise of Labor Power and the Global Rise of Corporate Saving". 05.02.2018 Geneva, Switzerland Redeker Nils;
CIS Graduate Workshop Talk given at a conference “Domestic Drivers of Austerity: A Rationalist Account of Adjustment Preferences” 11.05.2017 Castasegna, Switzerland Ray Ari;
Comparative Politics Workshop – Harvard University, Cambridge Individual talk The Politics of Stashing Wealth – The Demise of Labor Power and the Global Rise of Corporate Saving". 11.05.2017 Harvard University, Cambridge MA, United States of America Redeker Nils;
Political Economy Workshop - Harvard University, Cambridge Individual talk "Distributional Conflicts and the Politics of German Non-Adjustment in the Euro Crisis" 05.05.2017 Harvard University, Cambridge MA, United States of America Redeker Nils;
Annual Conference of the American Political Science Association Talk given at a conference ‘Insider-Outsider Cleavages during the Great Recession: Early Evidence from Spain. 07.04.2017 San Francisco CA, United States of America Ray Ari;
75th Annual Conference of the Mid-west Political Science Association, 2017 Talk given at a conference Is the Euro Irreversible? Interest Group Preferences towards Eurozone Disintegration in the EMU Periphery 06.04.2017 Chicago, United States of America Ray Ari;
CUSO Workshop: Comparative Capitalisms: the Eurozone Crisis and the Politics of Macroeconomic Management Talk given at a conference The Politics of Balance of Payment Crises 24.01.2017 Nyon, Switzerland Walter Stefanie;
Swiss Political Science Association Annual Meeting Talk given at a conference Domestic Drivers of Austerity: A Rationalist Account of Adjustment Preferences 11.01.2017 St. Gallen, Switzerland Ray Ari;
3-Länder-Tagung: „Regionalismus in einer entgrenzten Welt“ Talk given at a conference Krisenpolitik in Überschussländern - Materielle Interessen, Trade-Offs und Politikpräferenzen in der Eurokrise 20.09.2016 Heidelberg, Germany Redeker Nils;
International Studies Association Annual Convention 2016 Talk given at a conference Vulnerability to crisis resolution strategies and adjustment strategy choice during balance-of-payments crises 16.04.2016 Atlanta, United States of America Walter Stefanie;
Graduate Network Conference Talk given at a conference The Politics of Too Much - Surplus Countries in the Eurocrisis and Beyond 07.04.2016 Budapest, Hungary Redeker Nils;
8th Annual Conference of the European Graduate Network Talk given at a conference Dealing with the Deficit 06.04.2016 Budapest, Hungary Ray Ari;
SNIS Biennial Conference 2016. Political and Economic Inequality: Concepts, Causes, and Consequences Talk given at a conference The politics of unequal adjustment in the Eurozone crisis 25.01.2016 Zürich, Switzerland Walter Stefanie;
Greek Public Policy Forum 2015 Talk given at a conference Crisis Politics in Europe and Greece Vulnerability to adjustment, policy responses, and political conflict 09.10.2015 Chania, Greece Walter Stefanie;
Lucerne Master Class on „Markets and Democracies“ Talk given at a conference Surplus Countries in the Eurocrisis 01.10.2015 Luzern, Switzerland Redeker Nils;
American Political Science Association Annual Meeting 2015 Talk given at a conference Measuring vulnerabilities to different crisis resolution strategies 03.09.2015 San Francisco, United States of America Reinke Raphael; Walter Stefanie;
CES PhD Workshop: „Inequalities of Integration - Integration of Inequalities“ Talk given at a conference Domestic Sources of unequal Adjustment in the Eurocrisis - Group Vulnerabilities in Surplus Countries 07.07.2015 Paris, France Redeker Nils;


Self-organised

Title Date Place
"One Crisis, Many Perspectives"-Workshop 30.01.2018 Zurich, Switzerland

Communication with the public

Communication Title Media Place Year
New media (web, blogs, podcasts, news feeds etc.) Tweet on working paper Twitter International 2019
New media (web, blogs, podcasts, news feeds etc.) Why austerity is easier to implement in some countries than others–and why this was not the case for LSE EUROPP Blog International 2017
New media (web, blogs, podcasts, news feeds etc.) Four lessons from the Eurozone crisis–and why the future of the euro remains uncertain LSE EUROPP Blog International 2016
New media (web, blogs, podcasts, news feeds etc.) The euro zone is in crisis. Here are the four most important lessons to take away The MonkeyCage Blog International 2016
New media (web, blogs, podcasts, news feeds etc.) Was man über die Eurokrise wissen muss deFacto Blog German-speaking Switzerland Western Switzerland Italian-speaking Switzerland Rhaeto-Romanic Switzerland 2016
Media relations: print media, online media «Jetzt haben wir den Schlamassel» SRF online German-speaking Switzerland 2015
New media (web, blogs, podcasts, news feeds etc.) Crisis Politics in Europe: Vulnerability to Adjustment, Policy Responses and Political Conflict Greek Public Policy Forum International 2015
Media relations: radio, television Studiogast zum Thema Griechenland-Krise SRF 10vor10 German-speaking Switzerland 2015

Associated projects

Number Title Start Funding scheme
174909 The Political Economy of Macroeconomic Adjustment in the Eurozone Periphery 01.10.2017 Doc.Mobility

Abstract

The euro crisis has turned into the most serious challenge the European Union has ever had to face. Although the causes of the crisis are increasingly well understood, the politics of the crisis are not. This project aims at shedding light on three important puzzles that existing research has not yet been able to resolve. First, why have some governments been able to implement far-reaching reforms, whereas reform progress has been rather spotty in other crisis countries? Second, why have some countries seen serious political turmoil, while others have experienced less public and political opposition? And finally, why have surplus countries been willing to bail out deficit countries, but have varied in their willingness to adjust their own economic policies in an effort the ease the adjustment burden on the South?The project argues that these differences can be explained by the variation in societies’ vulnerabilities to different types of policy responses to the crisis. The argument builds on the insight that the euro crisis is, at its root, a balance-of-payments crisis. The imbalances that underlie such crises can be resolved either through significant economic policy adjustments both in the (peripheral) deficit or the (northern) surplus countries, or be addressed by providing external financing to deficit countries. I argue that the resulting distributive struggles surrounding the politics of the euro crisis in surplus and deficit countries are distinct but related, and should therefore be analyzed in a unified framework. The chances for swift and substantial adjustment are enhanced when politically influential interest groups exhibit a low vulnerability to at least one type of adjustment. In contrast, in contexts where significant parts of society are vulnerable to any adjustment, crisis politics is very contentious. Surplus countries with such a vulnerability profile attempt to push most of the adjustment burden onto deficit countries. In return, they are willing to provide external financing to deficit countries, but this generates conflict about on who should bear this financial burden. Since deficit countries are in a weaker position to push adjustment costs onto surplus countries, the distributional conflicts there revolve around how the cost of adjustment is to be distributed among different societal groups. Empirically, the project examines how vulnerability profiles affect domestic crisis politics and policies on two levels of analysis, the interest-group and the national level. It uses a mixed-methods research design that combines two sets of qualitative comparative case studies of the domestic politics of the euro crisis in surplus and deficit countries, respectively, with a quantitative analysis of national vulnerability profiles and crisis politics in a wider set of countries. The overarching goal of the project is to generate an encompassing picture of the distributional politics of the euro crisis and a better understanding of the constraints under which European policymakers operate in their attempts to solve the crisis.
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