Can expert knowledge prevent the "Grexit"? Expertise and the Greek Debt Crisis

Term Paper, 2015

20 Pages, Grade: 1,3


Dedicated to the wellbeing of the Greek citizens,
overcoming the crisis in Europe
and to the wellbeing of all European Citizens in democracy.


1.Introduction ... 3

2.Historic view ... 3
2.1. Euro-Zone / Euro ... 4
2.2: Southern Countries of Europe ... 5
2.3: Historic view on Greece: Olympia 2004, Infrastructure and Government ... 5

3.Current Crisis – Areas of problems: ... 7
3.1: Hard talks – europeanisation – Germany / France: ... 7
3.2: Cock-fights – Experts in the Euro-Group ... 8

4.Experts and Expertise, an analysis ... 10
4.1: Existing practice on hiring experts in the EU ... 10
4.2: International Finance – Currency – and the special Euro Structure ... 11
4.3: Areas of problems: ... 12
4.4: Experts of the Euro-Zone / Euro Group: ... 12
4.5: Areas of expertise: ... 14

5.Expertise, advice or conflict of interests? / An Other look at Germany and USA ... 14
5.1: Germany: ... 14
5.2: USA ... 15

6: Citizen expertise: ... 15

7.Conclusion & Suggestion ... 16

8.Abbreviations: ... 19

9.Sources ... 20
9.1: Readings: ... 20
9.2: Video-Links ... 20

1. Introduction

The debt crisis in Greece is not new. Even before the Euro-Zone was installed by currency, Greece did not fulfill the restrictions, yet preparing to host the Olympic Games 2004, the Euro was a kind of necessity for a smooth proceeding. The Euro seemed to be a foundation for cooperation and prosperity.

Looking at the debt crisis talks in 2015, one can hardly see cooperation at work, advices from all kinds of sources seem to pop out of nowhere into Media, and even Varoufakis that one could consider an expert, an economist serving as Financial Minister, resigns despite a ballot victory. So the questions remain: What advice to give? What road to take? What expertise to trust or to follow? Whom rather not listen to?

The following work was inspired by the Seminar on Policy expertise. The question was, what expertise could do and what not. In the following work, I answer this question by analyzing areas of expertise and reflecting on what could be achieved by expertise or not. I start with a historical view on the founding of the EU, then on the Euro and how this might relate to areas of problems in the current crisis. Then I would like to give a different view on the “Greece crisis” and what might have contributed to it. Following this there will be several listings of areas of experts and expertise as well as some discussion on the problems that showed up during the summer 2015 talks between Schäuble, Varoufakis and the Euro-Group that might highlight some problems experts or expertise might face in any situation.

The last chapter summarizes main issues and contains a rather unusual approach for a solution: helping the Greek people directly in order to boost their own expertise on how to solve their problems.

Please note: As I am not a native speaker, whenever a German article or newspaper is cited, I maintain the German language as in the original. Additionally to this, I excuse for any mistake in grammar or terms.

2. Historic view

The EU was founded as a project to end the threat of another war in Europe. Initialized 1946 in a speech by Winston Churchill1 / UK after the Second World War, the main topic was, how to get both nations France and Germany not go to war again with each other? As coal and steel usually were the spoils of war, the conclusion was: a cooperation on steel and coal – The “European Montan Union”, founded in 1951, Founding nations: Belgium, France, Germany, Italy, Luxemburg and the Netherlands, so mostly the nations around the Rhine, Moselle and Saar, where the main coal- and steelindustry was settled. These regions in the past centuries usually changed nationality on a kind of regular cycle depending on war and winner. Winston Churchill vowed, that UK would later join this cooperation, but due to after-war crisis it would be necessary to first take care of the UK issues. Great Britain later joined the EU in 1973. In 1974 Greece was considered as EU member, as they succeeded in overcoming a dictatorship towards a democratic state. Greece became a EU member state in 1981. After the fall of the Iron Curtain / the end of the cold war era through Gorbatchov, the enlargement of the EU and NATO took place. Austria joined the EU, followed by more and more of the Eastern States formerly belonging to the USSR. There were even discussions at that time, whether Russia should join the EU.

One might therefore notice, that regarding the current crisis in Greece, it belongs to the “elder” members of the European Union. It is not one of the newer members of the EU-Enlargement period, where crisis in the adaption of the European System could be expected. It is also of importance to refer to the complexity of European entanglement of membership in EU or Euro-Zone2. It is a matter of suggestion, whether “newer” members of the EU and the EURO-Zone would have faced a different treatment in case of a crisis. Nevertheless, being an elder member of the EU ensured Greece 2001 to join to the Euro-Zone though Greece was already too much in debt and not fulfilling the implementation criteria.3 More reflection on probable background reasons in the next chapter regarding Olympics.

2.1. Euro-Zone / Euro

After the end of the cold war and the reunion phase the currency issues in Germany were in a mess due to two separate currencies. The DM was strong, the east-currency was unstable and overrated, yet the unification of Germany needed a stable economic foundation, therefore the overrating was implemented as exchange rate to DM. The world community was skeptical about a unified Germany, ghosts of the past rising in terms of the strength of this nation, especially in economic issues. As all states especially the EU-States feared another superpower Germany, Germany offered to give away the power of the DM towards a European Currency. As the DM was such a success, the Euro was formed mainly under the guidance of the German Central Bank, as they offered the guideline and their success concepts. The structure of the German banking system was transferred and europeanized

into the Euro-Banking concept4. First the Euro was implemented as a calculation unit 1996, later as a currency. No nation alone had a strong impact any longer, all were depending on cooperation and implemented similar structures of the banking system. Guidelines were drafted and accepted by all participating countries, that included also debt and Gross National Production (GNP). To keep the Euro as a currency strong, strict rules were implemented. Yet, the DM was a strong currency in an industrial producing economy. Just as the founding thought was built on peace through coal and steel, the strength of the currency is also related to this. With the Euro in the Euro-Zone, the member states of Europe differ in their economy, the southern countries tend to have more agricultural, less production based economy. It is the middle area in Europe that is rich in coal and steeland other productive resources, so not all nations could adapt such a structure in ease.

2.2: Southern Countries of Europe

In this segment I would like to highlight a possible area of underlying prejudice: the differences between the northern and southern countries of Europe. The southern states are referred to as lazy. Yet the southern parts of Europe tend to be more rural, maritime and agriculture in nature. The wealth that rose during the industrialization period in the northern part of Europe lead to social breaks and fights, slowly leading from the split in the social classes and the poverty rates and child work to a more stable working class and middle class. The southern countries of the EU have less steelindustry or producing industry, yet more emphasis on travel industry, travel related industry and maritime/agriculture. As they are more likely to be the holiday destinations of the North, there might be a tendency to look at them as lazy, even though by working hours Greece is one of the member states with the highest working hours amount per worker.5 If expertise is involved, one might have to face this different economy and the fact, that the Greek people already work that hard. It might be a sign, that through work related activity alone or regulations the process of social welfare might not be reached.

2.3: Historic view on Greece: Olympia 2004, Infrastructure and Government

In the current Grexit discussion the main question discussed is, whether Greece should leave the Euro-Zone. It might be interesting to look again into history, as in fact Greece is adviced or expected to be leaving the Euro Zone since 2009, and – as above mentioned – it never fulfilled the criteria of the Euro-Zone anyway. Yet, what added to the crisis?

In 2004, Greece was home of the Olympic Games. For the first time since the re-invention of the Olympic thought in 1896, Olympia came back to the land of its origin. Greece wanted to

shine brightly its heritage into the world. Instead, the nation was exhausted monetarily and on infrastructural terms, being in debt as the Olympics were an economic failure of vast extend. During the preparation of the Olympics, Greece enhanced the infrastructure, yet a lot of architectural and engineer problems showed up, streets were not completed, stadiums built with no or few security aspects, sometimes arenas or whole city districts build for this event only and not as a lasting contribution to the nations status quo6. Sometimes these buildings were constructed with no structurally safe architecture. Adding to this, the 9/11 crisis brought high security demands, that Greece was not able to address completely. With a Euro expected to ease and boost ticket sales, in fact tickets were sold scarcely. The Olympics could be seen as a financial failure with infrastructural buildings partly worthless or erected for this event and erased afterwards.

The country therefore did not expand in welfare but people saw glamor coming and going, they saw buildings, apartments, streets put in place and then erased or falling apart7, not contributing to an increase of the quality of life of their citizens. Also the Euro did not fulfill the hopes that were placed on it.

The current referendum in Greece adds to this rift. Even though the Greek seemed to have a choice, after the referendum it turned out otherwise. Faced with an option similar to the one they neglected, and the winner of the referendum leaving the office instead being strengthened in negotiations, the democratic procedure turned to the opposite of what the Greek people seem to have voted for.

To summarize the historical view on the European Union, here the main points of reflection:

- The European Union is different than the Euro.
- Germany and France are main factor and actors in any crisis, as they were the foundation of the first original contract, the Montan Union.
- Greece was already in debt when joining the Euro Zone.
- As the Euro is structured in similar ways than the former DM, Germany is always a main factor at any currency issue.
- Due to their main knowledge on how to handle and balance currency crisis in the structure of the DM Germany is in the role of an expert.
- The EU and the EURO were founded mainly on coal and steelproducing industries and economies.

Each member state has a different form of economy, therefore reasons or causes of economic crisis. One can see this also as a difference between the Northern and the Southern member states. So regarding areas of problems and therefore areas of expertise, some main issues need to be addressed too:

- Self-confidence of the Greek citizens
- Participation in political affairs
- Confidence in their government and administration
- Quality of the infrastructure and life in Greece in comparison to the other fellow EU-States.

3. Current Crisis – Areas of problems:

3.1: Hard talks – europeanisation – Germany / France:

During the hard-liner-talks in 2015 media started to talk about Germany’s Finance Minister Schäuble to have ruined the French-German friendship in one night; a friendship built since the founding of the Montan Union. France might be one of the next member states needing help in monetary issues regarding Euro, the own inner crisis in France is mounting and President Hollande might be in need to create a buffer space for crisis to come. 8

From the historic point of view one can add another reason for the clash: In 1965, France recognized the intensity of the europeanisation “dominoeffect”. It was part of the first initial thoughts, that the nations of Europe would grow closer the more the economic entanglement took place. Due to the close connection of steel and coal to other economical issues and tariffs, the europeanisation was a growing factor with a self-inherent speeding up in interconnectedness between the nations. France, recognizing it might lose some of its power, started to keep away from meetings, which blocked the decision making process and brought it to a halt. This was called the phase of the “empty chair crisis”, as France did not take their chair in the meetings. The EWG/EU agreed to slow down the europeanisation , especially maintaining more of the national sovereignty. So France somehow “historically” is also known for a rough and tough style in the European community when it comes to sovereignty issues and own interests.

In the recent weeks further press articles reported France and Germany both work on a concerted or at least cooperational action to change some of the regulations and rules in the Euro-Zone, so one can see in the past weeks a shoulder-to-shoulder act from both of the states. 9


1 Die Gründerväter Europas: abgerufen am 10.08.2015.
2 Rechtliche Spielräume für einen Grexit: abgerufen am 10.08.2015.
3 abgerufen am 10.08.2015.
4 William E. Paterson (2010) Does Germany still have a European Vocation?, German Politics, 191, 41-52, DOI: 10.1080/09644001003588556.
5 Average annual hours actually worked per worker abgerufen am 15.09.2015.
6 ,abgerufen am 21. September 2015.
7 abgerufen am 21.09.2015.
8 Deutschland muss deutlich machen, dass Frankreich nicht nur Juniorpartner ist:, abgerufen am 24. July 2015.
9 abgerufen am. 22.09.2015.

Excerpt out of 20 pages


Can expert knowledge prevent the "Grexit"? Expertise and the Greek Debt Crisis
Technical University of Darmstadt  (FB 02 / Institut für Politikwissenschaft)
Policy II: Role of Expertise
Catalog Number
ISBN (eBook)
ISBN (Book)
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grexit, expertise, greek, debt, crisis
Quote paper
Octavia Gentemann (Author), 2015, Can expert knowledge prevent the "Grexit"? Expertise and the Greek Debt Crisis, Munich, GRIN Verlag,


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