Political Economy of Eurozone Debt Crisis in The Context of Varieties of Capitalism Debate
After the collapse of the Soviet Union, capitalism became the dominant economic system that attracted academia to the subject. While most of the studies on capitalism put "state" at the center of their analysis/theories, the varieties of capitalism (VoC) theory put the firm at the center of its analysis, which made it popular in the last two decades. VoC classifies the economy according to firms' strategy to overcome five spheres where potential problems arise: industrial relations; vocational training and education; corporate governance; inter-firm relations; and employees. VoC also makes a classification of national economies: liberal market, coordinated market, and mixed market economies. This study analyzes the Eurozone debt crisis within the framework of VoC theory and takes the German economy as the case study to link the debt crisis with the national economies and the existing economic and monetary policies of the Eurozone (Economic and Monetary Union, EMU). Germany is examined in terms of its economic characteristics; her role in the establishment of EMU policies; and her response during the Eurozone debt crisis. The scope of analysis is limited to the time period between the establishment of EMU and Eurozone debt crisis, and to the geography of the Eurozone continent (Northern and Southern economies). The methodology of the research is a desk-based analysis of macroeconomic statistical data. The basic argument of this study is that the existing EMU policies are designed to contribute to national economies of the northern countries (coordinated market economies) denoted by the basic macroeconomic indicators and the conclusion of this study concludes that Eurozone debt crisis was a consequence of common policies of Eurozone that neglected the unique peculiarities of member states' economies. The findings of this study suggest that instead of uniformity of economic and monetary policies, unity in diversity would be a better solution to the problems of EU in times of crisis. ; ACCEPTANCE AND APPROVAL i YAYIMLAMA VE FİKRİ MÜLKİYET HAKLARI BEYANI ii ETİK BEYAN iii ABSTRACT iv TABLE OF CONTENTS vii ABBREVIATION LIST ix GRAPHS xi INTRODUCTION 1 CHAPTER 1 8 CAPITALISM OR CAPITALISMS 8 1.1. NATIONAL DIFFERENCES IN CAPITALISM AND THE LITERATURE BEFORE 1980S 8 1.1.1. The Literature Before 1980s 10 1.2. NATIONAL DIFFERENCES IN CAPITALISM AND THE LITERATURE AFTER 1980S: PROPAGATION OF FREE MARKET ECONOMY 11 1.3. POST-1980S LITERATURE 12 1.3.1. Classifications 13 1.3.2. Convergence vs. Divergence Debate 15 1.3.3. Other Debates 16 1.3.4. Financialization 18 1.4. VARIETIES OF CAPITALISM 18 1.4.1. Stages of Capitalism Approach (SoC) 19 1.4.2. Varieties of Capitalism (VoC) 23 1.4.2.1. Industrial Relations 26 1.4.2.2. Vocational Training and Education 27 1.4.2.3. Corporate Governance 29 1.4.2.4. Inter-Firm (Company) Relations 30 1.4.2.5. Internal Structure (Employees) 31 1.4.2.6. Assessment of Varieties of Capitalism 32 1.4.2.7. Critics of Varieties of Capitalism 37 1.4.3. Critics of Dual Classification 40 1.5. MARKET DIVERSITY 43 1.6. TRANSITION ECONOMIES 47 CHAPTER 2 54 GERMAN POLITICAL ECONOMY 54 2.1. EARLY PERIOD 54 2.2. INTERWAR PERIOD 58 2.3. THE RISE OF ORDO-LIBERALISM AND SOCIAL MARKET ECONOMY 62 2.3.1. Ordo-liberalism 63 2.3.2. Social Market economy (SME) 66 CHAPTER 3 74 ANALYSIS OF EUROZONE DEBT CRISIS IN THE CONTEXT OF VARIETIES, CASE OF GERMAN CAPITALISM 74 3.1. GERMAN CAPITALISM (COORDINATED MARKET ECONOMY) 74 3.1.1. Unification of Germany 77 3.1.2. European Union 78 3.1.2.1. The Economic and Monetary Union (EMU) 80 3.1.2.2. German Influence on the EMU 82 3.2. EUROZONE DEBT CRISIS 85 3.3. GERMAN REACTION TO EUROZONE DEBT CRISIS 88 3.4. ANALYSIS OF DEBT CRISIS THROUGH THE GERMANY CASE 89 CONCLUSION 104 BIBLIOGRAPHY 115 APPENDIX 1. CODES, NAMES AND PROTOCOL ORDER OF EUROPEAN UNION (EU) MEMBER STATES 127 APPENDIX 2. ETHICS COMMISSION FORM 128 APPENDIX 3. ORIGINALITY REPORT 129 ; -
