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The Eurozone Crisis & the Future of Greece
Arnold Walter Professor of Political Science at Yale
I am a Professor of Political Science at Yale. I study European politics and I am very interested in the Eurozone crisis and how the Greek crisis was inserted into it. My book “Modern Greece: What Everyone Needs to Know About” was published in May by Oxford University Press. I welcome questions on the causes and character of the Greek crisis, on how it played out in Europe, and what it tells us about the future of the process of European integration.
This Q&A took place between 10/2/15 and 10/9/15. Unanswered questions have been hidden
10 questions
Product Guy / Fellow @ Harvard Ash Center
Welcome aboard Stathis Kalyvas! Many European experts are warning against what has been referred to as a "demographic time bomb," due to the rise of the Muslim population in Europe.

In your opinion, how critical of a problem is that? If you were an EU policy maker, how would you deal with the issue?
Arnold Walter Professor of Political Science at Yale
I think it is a big challenge as well as a big opportunity for Europe.

To state the obvious, it is a big opportunity because Europe's low birthrate calls for an infusion of young people. But it is also a challenge because it always takes time and effort to welcome and integrate immigrants.

Contrary to many commentators, I do not think that because of its history and culture, Europe is badly positioned to succeed in this endeavor. It may lack the tradition and nimbleness of the USA or Canada, but it has received and accommodated in the past millions of immigrants with considerable success.

Likewise, I do not share the concern that Muslim (or, more narrowly, Arab) immigrants represent a uniquely difficult population to accommodate. The rise of a militant, extremist political Islam has offered opportunities for radical action to a few thousand Muslim young people who, for a variety of more or less justified reasons, feel excluded from mainstream European society. However, we should understand this phenomenon to represent a specific historical moment rather than a deep, cultural characteristic of Muslim immigrants.

If I were a European policy maker, I would invest in conveying to the population why immigrants are needed and I would try to delegitimize racist behavior; I would also try to convey to immigrants what their rights and obligations are; and I would also invest in structures of integration. As I said, this is not easy, but I do not think that it is as hard as people make it to be either.
Researcher @ Harvard | Parlio community manager
What do you think are some of Greek's lesser-known, lesser "advertised" accomplishments in recent history? The financial crisis overshadowed much of their domestic and foreign politics, and would love to know what you would highlight as their recent achievements that non-Greeks should know more about.
Arnold Walter Professor of Political Science at Yale
As I argue in my last book, "Modern Greece: What Everyone Needs to Know," Greece is a case of historical success rather than failure.

This argument is based on the fact that it is arguably the most successful post-Ottoman state in terms of per capita GDP, even taking the current crisis into account. This accomplishment is even more surprising if one looks at the fact that it was a backward province of the Ottoman empire deprived of significant natural resources. Greece was a poor, non-western country that managed to converge with the core of Europe in a way that is imperfect and incomplete, but overall quite remarkable.

Greece was able to build a parliamentary democracy and introduce universal male suffrage very early (in the 1840s), had a long record of peaceful parliamentary politics, was able to integrate one million refugees into a population of five million in the 1920s, was the only state in the Balkans to escape communism in the 1940s, and experienced an early and very fast process of economic development after the 1950s.

Of course, Greece also suffered many calamities during its history. But its overall record has been quite positive. Even after the economic shock it underwent since 2009, it remains a wealthy democracy with an enviable standard of life in comparative terms. It is easy to forget this when focusing on its recent trials only.
Senior Lecturer at Bush School of Texas A&M University
What are the new ideas in political science that help us understand the nature and future of democracy? Who are the top political science public intellectuals and academic theorists? Top three books on European politics?
Arnold Walter Professor of Political Science at Yale
That's a tough question. Rather than provide a long list of authors and books, I will point to a book which I found to be fascinating: Robert Putnam's, Making Democracy Work. By comparing the different regions of Italy to each other, he is able to describe in concrete terms what makes democracy more effective in some places and to formulate a very interesting argument about what explains some very big differences between regions. It is worth a read.
Senior Fellow for Innovation at Alliance for Peacebuilding

Somewhat lost in the shuffle of the discussion of the migration crisis is its impact on Greece itself.

Given its own difficulties, how has the government and/or civil society fared given the additional burdens posed by having hundreds of thousands of migrants passing through the country?
Arnold Walter Professor of Political Science at Yale
With the exception of a few islands in the Aegean that became landing spots for migrants, the bulk of the country has not been burdened by the recent migration wave, as most migrants made their way quickly to Greece's northern borders. This makes sense: the economic situation in Greece today does not offer many opportunities to immigrants.

That could change in the future, of course, if more migrant waves arrive and get stuck in Greece. This would be a bleak prospect.
Professor Kalyvas, have there been any other financial crises comparable to the one Greece is in now? If so, how have those countries been able to overcome them?
Arnold Walter Professor of Political Science at Yale
In terms of magnitude, the Greek crisis is absolutely comparable to the Great Depression in the US. However, what worked for the US in the 1930s and 1940s will not necessarily work for Greece today. Some commentators have compared the Greek crisis to the Argentinian one in 2001. Indeed, there are several similarities, but considerable differences as well. For example, Greece does not have a single currency peg, but no currency at all. On the more positive side, one could try to learn from financial crises that were successfully overcome through IMF programs, such as South Korea's in 1997 and Turkey's in 2001. It is difficult to isolate a single factor that led to recovery, but I would highlight the presence of political leaders who owned the recovery program, explained it to the people, and where able to inspire them through hard times. Unfortunately, that element was lacking in Greece.
Is the book available in Greece?
Arnold Walter Professor of Political Science at Yale
"Modern Greece"was translated, adapted, and published in June, just when capital controls when introduced. The publisher could not even get the book to bookstores because of the economic uncertainty at the time! I thought no one would read it. Fortunately, the worst was avoided and the book became a best-seller which made me very happy.

Details about it here:
Hi, Stathis, and thank you for doing this. We haven't talked since the recent election, and I'm very keen to hear how you think Greece and Europe are going to interact and influence each other in this next phase...
Arnold Walter Professor of Political Science at Yale
A lot will depend on what happens in the next sixth months. The best scenario is the following one: the government decides to own the latest bailout program and manages to mitigate the pain by focusing on well-targeted structural reforms. After an initial period of recession, the economy rebounds (it was supposed to rebound in 2015 and suffered because of the political uncertainty), Greece's creditors reward it with some debt relief and related measures and this leads to a more sustained recovery. Unfortunately, I cannot tell what the likelihood of this scenario is and what the bad scenario would look like in case of failure. Or perhaps, I do not want to think about it.
International Advisor and Consultant: Peace & Security
Professor Kalyvas, thank you for answering our questions. All of a sudden, the Grexit term has disappeared from the media. Do you think that this is really the end of this story or we'll see more of Grexit (threats, etc.) over time? In terms of the abrupt "solution" to the Greek crisis last summer, and the uncontested German hegemony evident in the process, what impact will this have on European integration in the future?
Arnold Walter Professor of Political Science at Yale
Grexit is off the table for the moment both within Greece and outside. In a sense, we are back to July 2012, which was the previous inflection point. This is not necessarily the end of the story. Even if the Greek economy continues to deteriorate beyond a period of two or three years, it is difficult to think that it will continue in the Eurozone. On the other hand, even the thought that Greece would exit is enough to introduce political uncertainty into the mix and undermine a potential recovery.

I think the story of what happened during the summer is more complex. It appears that Germany "won" by refusing to retreat on the issue of the debt. This perception, while not incorrect, must be qualified, however. For one thing, it was not only Germany that refused to revise the Greek deal, but all the Eurozone states with not a single exception. Why? I think because Greece ran a disastrous negotiation. At the end it did not matter if Greece was right or not, but the fact that Greece was trying to blackmail the Eurozone into revising the existing deal. If the Eurozone had folded, the euro would have collapsed since any member state would have learned from this that it could escape the rules if it didn't like them, thus undermining the currency. The second thing to keep in mind was that Germany did not get its preferred outcome which was to kick Greece out of the Eurozone. It is clearly powerful within Europe, but it has to build coalitions with other member states and this means that it has to compromise.

Many people think that this crisis is an indication of the failure of the Eurozone of even Europe. I am not so sure. Of course, the spectacle of acrimonious bargaining is not compatible with the notion of solidarity between member states. But we have to keep in mind what the European integration experiment consists of: nothing less than getting sovereign nation states to forego their sovereignty. In the past, such processes required war. The European integration process was in a sense designed to advance through crises: only by making the cost of defecting higher than the cost of staying put, would sovereign nation states concede parts of their sovereignty. This does not mean that the are no risks, but simply that there is no alternative way to achieve more integration. Seen from this perspective, what happened this summer was part and parcel of the European integration process.
Hi, Stathis, what do you make of the rise of extremist movements like Golden Dawn?
Arnold Walter Professor of Political Science at Yale
It's one of the most depressing aspects of the Greek crisis. The positive thing is that it appears to have reached its electoral limits. Its leadership is under prosecution since GD activists assassinated an opponent and its rhetoric appears to have lost its capacity to bring in more voters. There are similar movements in Europe, though few of the radical right parties are so extreme as GD, but the seem to have a difficulty to cross a certain electoral threshold.
What industry or industries within Greece have the greatest potential to turn that economy around? What can the EU do to locate industries, such as manufacturing, within the under-performing member countries to benefit those specific countries and the Union as a whole?
Arnold Walter Professor of Political Science at Yale
Greece's great comparative advantage is its natural setting. It is an amazing beautiful country (and I am not saying this because I am Greek!). Hence, I would expect that in the future it will be able to attract millions of Northern Europeans for work, study, leisure, and retirement, very much like the American Sun Belt has. There is no reason why a German retiree has to spend the winter in Germany. There are hundreds of traditional villages in the Greek mountains that are (a) beautiful and (b) accessible, thanks to massive investments in transportation infrastructure. You can land in Athens and in two hours find yourself in a wonderful mountain village of the Peloponnese, itself an hour from both a ski resort and a great beach. All that is needed is political stability and a good investment climate for all this to take off. Presently, prices have hit the bottom, so it's a good time to buy!