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The Eurozone crisis and the ‘intermediate’ economies: the political economies of Greece and Portugal

Myrodias, Konstantinos (2020) The Eurozone crisis and the ‘intermediate’ economies: the political economies of Greece and Portugal. PhD thesis, London School of Economics and Political Science.

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Identification Number: 10.21953/lse.00004308


It is well documented that the EU and IMF bailout programmes led the crisis-hit Eurozone countries to a weak economic recovery. However, the existing theories have so far failed to provide comprehensive explanations of the post-crisis economic performance in the periphery of the Eurozone. This thesis’ starting point is to identify what policies were introduced in Greece and Portugal and how effective they were at addressing the causes of the crisis. To answer this question, it draws on qualitative primary data, documents, archives, and elite interviews. In contrast to the neoclassical explanation that stresses the ‘backwardness’ of the countries in the periphery, as well as more critical Keynesian/‘victimisation’ approaches that understand the crisis-hit countries as ‘victims’ of the creditors, this thesis -by building upon Comparative Political Economy literature- provides a Growth Model explanation of the crisis and the post-crisis economic performance of Greece and Portugal. It shows why the EU and IMF internal devaluation policies failed to boost export-led growth in both countries and brings to light the much overlooked ways in which Greece and Portugal have been through a productive transformation in recent decades. The Growth Model perspective goes beyond the VoC literature, showing how the historical capital formation (i.e. the difficulty of creating economies of scale, and low-added value production), the fiscal policies, and the European and international economic developments (i.e. EU Eastern Enlargement, and the rise of the large-scale emerging economies in Asia) led Greece and Portugal into an ‘intermediate’ trap. The ‘politics’ of the crisis management -based on the neoclassical versus ‘victimisation’ narratives- reinforced the ‘intermediate’ status of Greece and Portugal after the crisis. Although the existing literature tends to focus on the creditor’s role in the management of the crisis, this thesis brings evidence from the EU-IMF bailout negotiations showing that both the creditors and the anti-austerity governments in the debtor countries kept the structural aspects of the crisis out of the negotiations to maintain the status quo in the Eurozone. Overall, this thesis brings the Growth Model perspective and VoC into a productive dialogue, contributing the concept of the ‘intermediate’ economies to the European Political Economy.

Item Type: Thesis (PhD)
Additional Information: © 2020 Konstantinos Myrodias
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
J Political Science > JA Political science (General)
J Political Science > JN Political institutions (Europe)
Sets: Departments > International Development
Supervisor: Wade, Robert Hunter

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