Greece, Germany and the Eurozone Crisis: Preferences, Strategies and Power Asymmetry

ABSTRACT This paper shares the premises that it is the power asymmetry factor that has framed Greece’s preferences and strategies in EMU governance and reform. Still, Greece’s shifting negotiation tactics during the eurozone crisis have been heavily influenced by the overriding policy-making model and political leadership in the country. As power asymmetry deepened during the crisis years and while standing on the brink of economic collapse and eurozone exit, Greece did not have a viable fall-back position in pursuing its preferences. This paper explains why Athens pursued a fence-sitting strategy in EMU reform with, however, instances of foot-dragging primarily when negotiating the bailout programmes, reflecting the absence of an alternative and viable crisis-exit strategy tabled by Athens. The persuasion-based interaction between Athens and Berlin is also discussed. The paper shows that domestic politics can be indispensable to adequately explain specific small state strategies and players’ interaction in the context of EMU governance.