Matsaganis, M. – To Archeio

The Distributional Impact of Austerity and the Recession in Southern Europe

apostolos — Tue, 16 Apr 2019 22:25:28 +0000

Southern European welfare states are under stress. On the one hand, the recession has been causing unemployment to rise and incomes to fall. On the other hand, austerity has affected the capacity of welfare states to protect those affected. This paper assesses the distributional implications of the crisis in Greece, Spain, Italy and Portugal from 2009 to 2013. Using a microsimulation model, we disentangle the first-order effects of tax–benefit policies from the broader effects of the crisis, and estimate how its burden has been shared across income groups. We conclude by discussing the methodological pitfalls and policy implications of our research.

Social policy in hard times: The case of Greece

apostolos — Tue, 16 Apr 2019 22:25:14 +0000

The current Greek crisis started off in 2009 as a fiscal crisis, soon turned into a sovereign debt crisis, then mutated into a full-blown recession, unprecedented in depth and duration. The article offers an early analysis of the impact of the crisis on the labour market and the distribution of incomes, showing that the need for social protection is now much greater than ever before. It then critically reviews social policy responses in a context of both cuts to social spending and reforms in social programmes, arguing that the Greek welfare state is poorly equipped to meet the challenge. The article concludes by discussing prospects for social policy in an era of permanent austerity.

From Indecision to Fast-track Privatisations: Can Greece Still Do It?

apostolos — Tue, 16 Apr 2019 22:25:09 +0000

This paper explains how the collapse of growth after 2008, in combination with soaring public and external deficits, led to the escalation of Greek debt, while the government’s delay in responding to the crisis increased the cost of borrowing and necessitated the bail-out agreement with the IMF and the European Union. One year later, Greece is struggling to harness fiscal deficits amidst a deep recession and rising social tension. Debt sustainability has not yet been ensured and another tranche of loans has been negotiated under new terms and conditions, including higher taxes and extensive privatisations of public companies and property. The paper discusses the main failures of the bail-out agreement and why the lack of growth so far has undermined efforts at stabilisation. As an alternative, the paper suggests that with a modest return to growth, combined with fast-track privatisations, the prospects of debt sustainability improve substantially. In light of the recent debate on the European Stability Mechanism, the paper suggests that the bail-out facility should avoid the debt seniority condition, so that Greece could return to normal market borrowing after 2013 without raising new fears of ‘haircuts’ on private sector obligations