ABSTRACT
In the literature, the cooperation of the IMF and the EU in credit lending has been discussed either from a state-centric, bureaucratic or institutionalist perspective. In this article, we examine the Troika as a set-up of multiple organisational overlap providing bureaucratic agents with constraints and opportunities for strategic action. Taking Latvia and Greece as cases in point, we analyse who prevails in a situation of conflict and why. How do these international organisations manage to overcome their differences and reach consensus? Drawing on the Two-Level game approach, we argue that negotiators are more likely to prevail over each other when their respective win-set decreases. We find that different strategies to manipulate win-sets are decisive to explain both cooperation and assertiveness. Changing costs of no agreement during a lending programme as well as the institutional procedures for programme ratification facilitate the use of these strategies.
Acknowledgements
An earlier version of this article was presented at the ISA Annual Convention, 22–25 February 2017 in Baltimore, USA. We are indebted to Catherine Weaver, Mathis Lohaus, Tanja Börzel, Andreas Kruck, Sebastian Schneider and two anonymous reviewers for extremely helpful comments. Excellent research assistance was provided by Tim Schreiber and Tim Ferber.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes on contributors
Susanne Lütz is Professor for International Politics at the FernUniversität in Hagen. She has extensively worked on the regulation of financial markets, corporate governance and intellectual property rights and currently conducts a research project on Troika-debtor interaction in credit lending in the Eurozone. She has published ‘From Washington Consensus to Flexible Keynesianism? The International Monetary Fund after the Financial Crisis’, in Journal of International Organization Studies (2015); (with Matthias Kranke) ‘The European Rescue of the Washington Consensus? EU and IMF lending to Central and Eastern European countries’, in Review of International Political Economy (2014); and (with Thomas Eimer and Verena Schüren) ‘Varieties of localization: international norms and the commodification of knowledge in India and Brazil’, in Review of International Political Economy (2016).
Sven Hilgers is research fellow at the Chair for International Politics at the FernUniversität in Hagen. He is currently writing his PhD thesis at the Freie Universität Berlin about the European Central Bank. His research interests include international and comparative political economy, monetary regionalism, central banking and European integration.
Notes
1 During that period, we conducted a total of 105 non-standardised semi-structured interviews. Having promised our interviewees confidentiality, we refer to the interviews cited herein using anonymised codes.
2 While the Greek Loan Facility directed bilateral loans to Greece in the first programme, the European Financial Stability Facility (EFSF) provided loans in the second programme and its successor, the ESM, in the third programme.
3 The ECB participated in the negotiations for all programmes for Eurozone member states and the ECB mission teams have to act in liaison with the EC staff for the negotiations. A small mission of the ESM was part of the EU-side in the third programme. When it comes to drafting, however, it is mainly the EC staff who drafts the programme, which requires the approval of all Eurozone finance ministers.