Greece, Germany and the Eurozone Crisis: Preferences, Strategies and Power Asymmetry

ABSTRACT

This paper shares the premises that it is the power asymmetry factor that has framed Greece’s preferences and strategies in EMU governance and reform. Still, Greece’s shifting negotiation tactics during the eurozone crisis have been heavily influenced by the overriding policy-making model and political leadership in the country. As power asymmetry deepened during the crisis years and while standing on the brink of economic collapse and eurozone exit, Greece did not have a viable fall-back position in pursuing its preferences. This paper explains why Athens pursued a fence-sitting strategy in EMU reform with, however, instances of foot-dragging primarily when negotiating the bailout programmes, reflecting the absence of an alternative and viable crisis-exit strategy tabled by Athens. The persuasion-based interaction between Athens and Berlin is also discussed. The paper shows that domestic politics can be indispensable to adequately explain specific small state strategies and players’ interaction in the context of EMU governance.

Acknowledgements

We would like to thank Magnus Schoeller, Gerda Falkner and two anonymous reviewers for their constructive comments on earlier versions of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Trans-European Automated Real-time Gross Settlement Express Transfer System.

2 The negotiation of the third bailout programme by Greece’s SYRIZA-ANEL government in summer 2015 topped Harvard Law School’s List of ‘Worst Negotiation Tactics of 2015’. It was however replaced in a later revised version. Source: https://web.archive.org/web/20160115231916/https://www.pon.harvard.edu/daily/negotiation-skills-daily/top-10-worst-negotiation-tactics-of-2015/ (accessed 30 May 2020)

3 https://www.ft.com/content/18332c14-78f0-11e6-a0c6-39e2633162d5

4 At this point, it has to be mentioned that for the first time during the crisis years, all key opposition forces in the Greek parliament (New Democracy; Panhellenic Socialist Movement; To Potami) were in favour of continuing the status quo established by the ousting government of Antonis Samaras rather than backing SYRIZA’s revisionism.

5 The only issue of controversy prior to the outbreak of crisis was the faulty operation of a set of submarines Athens received from Berlin in 2000.

6 E.g. both Germany and the small states want to depart from the status quo (i.e. they are not in direct opposition), but they have different preferences on the type or design of change, and/or they use different strategies of realising it.

7 During a rally in Lesvos island prior to the May 2014 European elections, Alexis Tsipras, leader of SYRIZA incited the crowds saying ‘There is one message Greece should send [to the rest of Europe] … Go back, Madame Merkel; Go Back, Mr. Schauble; Go Back, Europe’s conservative establishment; Go Back, you people from the troika’ (Kokkinidis 2019).

Additional information

Notes on contributors

Georgios Maris

Georgios Maris is Associate Professor at the Department of Mediterranean Studies, University of the Aegean.

Panagiota Manoli

Panagiota Manoli is Assistant Professor at the Department of Political Science and International Relations, University of Peloponnese.