Panel II: CRISES IN THE EUROZONE

"Europas Gerechtigkeit" - Achte Internationale Jahreskonferenz des Exzellenzclusters "Die Herausbildung normativer Ordnungen"

Donnerstag, 29. November 2015, 15.45 bis 17.45 Uhr

Shortly after the collapsing financial markets had been rescued but the global economy had plunged into recession, the Eurozone became the center of economic turmoil. The sovereign debt crisis of several member states (Portugal, Ireland, Italy, Greece and Spain) was answered with the provision of European and international public loans on a hitherto unseen scale, which at the same time attached strict conditions to the receiving states. These conditions primarily concerned the implementation of economic reforms aimed at regaining the trust of the financial markets and boosting the competitiveness of the respective economies. Yet, as the recession worsened, the overall indebtedness of the states increased, and as the social fabric of the societies was on the point of rupturing (specifi cally due to extreme levels of unemployment, especially among young people) ever more actors began to oppose these prescribed reforms. In Greece a new left-wing party (Syriza) rose to power with the promise of  ending what it referred to as the undemocratic and unconstitutional politics of financial austerity. After five months of fi erce negotiations with the so-called Troika, however, this government accepted a reform package that consists toa large extent of austerity measures. This panel brings together contributions from economics, political economy and political theory that seek to explore the ongoing crisis tendencies of and within the Eurozone. From their respective viewpoints they ask how the framework of the EU and the specifi c nature of the Eurozone have contributed to these tendencies, as well as to the answers offered to the crisis; how the framework of economic governance within the Eurozone and the EU may have changed in the course of the crisis; and what prospects there are for dealing with the various dimensions of the crisis in the future.

Chair: Rebecca Caroline Schmidt (Managing Director of the Cluster of Excellence “The Formation of Normative Orders”)

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Rebecca Caroline Schmidt studied law focusing on criminal law, criminal procedural law and sentencing law at Goethe University Frankfurt am Main. Between 2007 and 2012, she worked as a research associate with Professor Dr. Klaus Günther in the fields of legal theory, criminal law and criminal procedural law as well as from 2010 until 2012 as a research associate and research coordinator with Prof. Dr. Dr. h. c. Andreas von Hirsch focusing on the theory and ethics of criminal law. She gained legal experience as an intern with Freshfields Bruckhaus Deringer and management experience as coordinator of several research projects at Goethe University. Since November 1st 2012, she has been managing director of the Cluster of Excellence “The Formation of Normative Orders”.

Chair: Prof. Dr. Rainer Klump (President of Luxembourg University and Principal Investigator of the Cluster of Excellence “The Formation of Normative Orders”)

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Rainer Klump was born in 1958 in Darmstadt. He studied economics at the universities in Mainz, Paris I and Erlangen–Nuremberg and received his PhD in 1986. In 1987 he was awarded the Heinz-Maier-Leibnitz-Prize in economic politics. Subsequently he was a visiting researcher in the International Finance Division of the Federal Reserve Board in Washington, DC. In 1991 he received his ‘Habilitiation’ in economics. Between 1992 and 1997 he was professor for economics and development at the University Würzburg. From 1997 until 2000 he held the Ludwig-Erhard endowed professorship and a position as chair of the department of economic politics at the University Ulm. From 2000 to 2014 he was Professor for economics, development and integration at the Goethe University Frankfurt am Main and principal investigator of the Cluster of Excellence “The Formation of Normative Orders”. Since January 2015 he is the president of Luxembourg University.

Vortrag 1
Prof. Francesco Mongelli (Senior Adviser in the European Central Bank in the Directorate General Research, and honorary Professor at the Goethe University of Frankfurt)

How to Exit the Crisis: Reflections on the 4 Unions. Why Do We Need Them?

Co-authored with Jean-Francois Jamet (ECB)

Abstract
We briefl y review various causes of the euro area crisis, examining in particular the flaws in the institutional framework of the European Monetary Union. Based on this analysis we will then provide an account of how the economic and financial adjustments need to be accompanied by institutional reforms and new forms of governance. Hence there is a lot of “repair work” ongoing. Subsequently, the lecture provides an account of what has been done already (Fiscal Compact, ESM, and recently SSM). Moreover, the Single Market withstood the crisis as did monetary and financial infrastructures. These are “shared assets”. Key question today: if so much has been done already why are we still in a crisis? Consider that there is also a global crisis with “debt-overhang” in various regions. Global Trade and Growth are slowing down especially in the BICS. Looking at Europe, reforms take time to display their positive effects. They must be  completed, explained, and understood. And they are only as good as they are implemented. Not surprising that confidence and some “European impetus” are still badly affected. Key issue today: there is agreement that EMU’s architecture must be completed by advancing along 4-Unions: fiscal, financial, political and economic unions. There are many synergies between these unions. But, there is also a political economy problem behind these unions: interdependencies between them suggests a need for sequencing or packaging but both have their difficulties. Sequencing is easier politically (allows to deal with legacy for instance) but it takes more time (which is not necessarily there, particularly in crisis times) and in some cases it may even not be optimal according to us (when there are two-ways interdependencies). Packaging is a priori optimal but not always possible (consumes political capital and reforms do not all take the same amount of time to be implemented).

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Francesco Mongelli is Senior Adviser in the European Central Bank in the Directorate General Research, and honorary Professor at the Johann Wolfgang Goethe University of Frankfurt. He holds a Master‘s degree and a Ph.D. in Economics from the Johns Hopkins University in Baltimore. He has worked at the ECB since 1998 holding various positions, including as organiser of the analytical agenda of DG Economics, editor of the ECB Occasional Paper Series, and in Directorate Monetary Policy. Prior to that he spent several years as an economist at the International Monetary Fund in Washington. His main area of research pertains to the transmission of monetary policy impulses, the effects of the euro on the functioning of EMU, the links between monetary policy and heterogeneity in the euro area, and the links between economic integration and institutional integration. He also teaches Economics of Monetary Unions at the Johann Wolfgang
Goethe University of Frankfurt. His papers have been published in various journals, such as the Journal of Money Credit and Banking, the Journal of Common Market Studies, Integration and Trade, Economie Internationale, Bancaria, and the Journal of Economic Integration.

Vortrag 2
Prof. John Milios (Professor of Political Economy and the History of Economic Thought at the National Technical University of Athens (NTUA), Greece)

Crisis and Austerity. Is there a Chance for the Welfare State?

Abstract
After the outbreak of the 2008 global economic crisis, extreme austerity policies prevailed in many parts of the developed capitalist world, especially in the European Union (EU) and the euro area (EA). Austerity has been criticized as an irrational policy, which further deteriorates the economic crisis by creating a vicious cycle of falling effective demand, recession and overindebtedness. However, these criticisms can hardly explain why this ‘irrational’ or ‘wrong’ policy persists, despite its ‘failures’. The first aim of the present paper is to give an answer to this discrepancy. The ‘unconventional’ role of the ECB, which does not function as a traditional lender of last resort, establishes a policy-making regime
in which austerity is the only way to deal with economic imbalances. In other words, austerity is offered as alternative to economic instability. What is urgently needed is a progressive policy setting that overrides this unfortunate trade-off.
The paper will address this issue mainly from the viewpoint of political economy.

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John Milios is Professor of Political Economy and the History of Economic Thought at the National Technical University of Athens (NTUA), Greece. He has authored more than two hundred (250) papers published or forthcoming in refereed journals (in Greek, English, German, French, Spanish, Portuguese, Italian, Chinese and Turkish) including the Cambridge Journal of Economics, History of Political Economy, History of Economics Review, Review of Political Economy,
European Journal of the History of Economic Thought, The American Journal of Economics and Sociology, Science & Society, Rethinking Marxism, Review of Radical Political Economics, and has participated as invited speaker in numerous international conferences. He has also authored or co-authored some twelve scholarly books. His most recent books in English are Rethinking Imperialism. A Study of Capitalist Rule (Palgrave-Macmillan 2009, co-authored with D.P.  Sotiropoulos) and A Political Economy of Contemporary Capitalism and its Crisis. Demystifying Finance (Routledge 2013, co-authored with D.P. Sotiropoulos and S. Lapatsioras). He is director of the quarterly journal of economic theory  Thesseis (published since 1982 in Greek) and serves on the Editorial Boards of four scholarly journals.

Vortrag 3
Dr. Kolja Möller (Post-Doctoral Fellow at the Cluster of Excellence “Normative Orders”)

Constitutionalisation of Austerity to Destituent Power: Democratic Challenges in the Context of the Euro-Crisis

Abstract
There is a widespread concern that European integration is more than ever a technocratic process which has lost its connection to the foundational dimension of democracy. According to many observers, the powerful role of the European Central Bank and the so-called “Troika” (ECB, European Commission and International Monetary Fund) as well as the mandatory character of austerity politics as enshrined in the fi scal treaty announce a postdemocratic shift in the overall architecture of supranational constitutionalisation. In my talk, I will scrutinize these tendencies and ask to what extent they can be contextualized as postdemocratic. Against this backdrop, I will discuss possible strategies to rehabilitate the foundational dimension of democratic constitutionalism and to deal with the profound abyss between the reference to „we-the-people“ as a central resource of political legitimation and the constitutionalisation of austerity politics. In the light of the emerging austerity constitution, constituent power must be reframed as destituent power on the European level – a counter-power which aims at a re-negotiation of hegemonic structures.

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Kolja Möller (1983) is a post-doctoral fellow at the cluster of excellence “Normative Orders”. His research focuses on transnational constitutionalism and international political theory. Before joining the cluster, he worked as a research associate at the collaborative research centre “Transformations of the State”, University of Bremen. He obtained his Phd at the University of Flensburg and received a grant from the German National Academic Foundation. His recent book Formwandel der Verfassung. Die postdemokratische Verfasstheit des Transnationalen (transcript 2015) outlines a critical approach to the changing role of constitutionalism in world society. Further publications include: A Critical Theory of Transnational Regimes. Creeping Managerialism and the Quest for a Destituent Power, in: Contested Collisions (Cambridge University Press, forthcoming); From the Ventotene Manifesto to Post-Democratic Integration. A Reconstructive Approach to Europe‘s Social Dimension, in: Europe at a Crossroad. From Currency Union to Political and Economic Governance? (Nomos 2015); Formwandel des Konstitutionalismus. Zum Verhältnis von Postdemokratie und Verfassungsbildung jenseits des Staates, in: Archiv für Rechts- und Sozialphilosophie 2/2015.

Video:

Audio:

Bildergalerie:

Goethe-Universität Frankfurt am Main, Campus Westend
Max-Horkheimer-Str. 2
Gebäude "Normative Ordnungen", EG 01 und EG 02

Veranstalter:
Exzellenzcluster "Die Herausbildung normativer Ordnungen"