The Euro Crisis: Regulatory Responses, Social Consequences, and Legal Strategies

BU's International Law Journal and the Hellenic Bar Association of Mass. co-host event examining the EU's financial crisis

greek and eu flagsThe Boston University International Law Journal and the Hellenic Bar Association of Massachusetts co-hosted “The Euro Crisis: Regulatory Responses, Social Consequences, and Legal Strategies” on January 17. A full house of alumni, faculty, students, and community members heard two expert panels discuss the euro-zone crisis, with a focus on the ongoing challenges in Greece.

Boston University Law Professor Daniela Caruso introduced the first panel: Associate Professor Philomila Tsoukala of Georgetown University Law Center; Professor Vivien Schmidt, director of Boston University’s Center for the Study of Europe; and Maria Panezi of Osgoode Hall Law School’s Institute for Global Law and Policy.

Caruso explained that understanding the Greek situation is key to understanding Europe’s idea of the crisis, in the same way that understanding Wall Street is key to Americans’ understanding of the crisis here. Additionally, she pointed to Greece’s holding the presidency of the Council of the European Union since January 1 as a vital reason to continue to examine the country’s changing role in the European Union.

Caruso lauded Panezi’s article, “Whose Crisis is it Anyway? Normative Frameworks in the Greek Financial Crisis,” in the Ohio Northern University Law Review. Schmidt has been a voice on the subject in popular media, Caruso said, including an opinion piece in the Boston Globe, “Eurozone Crisis Reveals Lack of Clear Leadership.” Caruso then said that Tsoukala’s work, including “Narratives of the European Crisis and the Future of (Social) Europe,” in the Texas International Law Journal, also contributes to understanding the complex situation.

Panezi opened by presenting a framework for interpreting the crisis. Even prior to entering the euro zone, she said, Greece’s economic picture “was not a happy one,” and afterward, its weak natural resources and industrial sectors remained stable—that is, at a very low level. The misunderstanding was fundamental. The EU, she said, is not like a fitness club where “first you join, then you get in shape.”

When the International Monetary Fund gave a standby loan to Greece, it was on one set of terms, but it soon switched those terms and imposed a new set of rules, contrary to its own standards, Panezi continued. Still, the Greek debt rose. Similarly, the European Union’s approach involved evolving, patchwork solutions to issues that had not been properly considered in advance. And within Greece itself, Panezi found a fundamental issue with delegation. There again, the rules were being rewritten to fit the crisis, including a controversial judicial interpretation of the requirements for passing a vital memorandum.

All three of these frameworks—the IMF, EU, and Greece—looked to solutions grounded in austerity measures. And all three faced constitutional or quasi-constitutional crises in the process, Panezi concluded.

Tsoukala, who joined the panel via Skype, began with something of a disclaimer: “Anybody who claims to speak for Greece is treading on thin ice.” She spoke on the future of social Europe, also the subject of her forthcoming article, “The Euro Zone Crisis and the Future of Social Europe.”

The issues, she said, are both EU-wide and country specific. She spoke about the effects of loan conditionality, structural reforms, and the arguments used by technocratic and neoliberal voices in framing this discussion. These issues go beyond Greece, with the emphasis on stability and austerity creating major consequences for social Europe. The trends seen in the Greek crisis are emblematic of the entrenchment of a neoliberal agenda across Europe, she found—one that will perpetuate as long as these conditions remain.

Maria Panezi and Vivien Schmidt
L to R: Maria Panezi and Vivien Schmidt

Agreeing with both speakers who came before her, Schmidt took on a larger contextual view of the crises, exploring “issues of democratic theory and legitimacy.” She sees these changes occurring in national governments within Europe, crossing political affiliations, as well. “Governing by the rules and ruling by the numbers,” she emphasized, is the pattern in the EU, and the consequences include democratic legitimacy concerns.

Schmidt recently edited a book, Resilient Liberalism in Europe’s Political Economy (with Mark Thatcher of the London School of Economics and Political Science), on the resilience of neoliberal concepts—such as austerity, despite Europe’s economic challenges since 1980. During the panel, she focused on the relationships among “input, output, and throughput” in the context of governments, agencies and organizations, economies, and societies. These elements must not be ignored, whether the focus is Greece, the EU, or the US, she said.

Finally, the panelists addressed an audience inquiry about the future of Europe. Tsoukala highlighted the damaging effects of Germany’s power in the euro zone; Schmidt presented her contrasting visions for what she called “EUtopia” and “DystopiEU;” and Panezi said that the recent crisis actually started in the postwar era and has been the rule, not the exception. Caruso joined them in saying Europe should look to its history to see all the possibilities, and concluded the panel with thanks to all the speakers.

The evening’s second panel featured Greg Peterson of wealth management firm Ballentine Partners; Constantine Karamanlis Chair in Hellenic and European Studies Michalis Psalidopoulos of the Fletcher School of Law and Diplomacy at Tufts University; and Max and Herta Neubauer Chair and Professor of Economics Yannis M. Ioannides of Tufts University.

The Boston University International Law Journal publishes articles, notes, and book reviews with a focus on international law, twice each year. Current and past issues are available online. The Hellenic Bar Association is a professional organization for attorneys of Greek descent that hosts both educational and social events.

Reported by Jaime Margolis ('16)
January 23, 2014

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