The Politics of Bad Options
Why did the eurozone crisis prove so difficult to resolve? Why were adjustment burdens distributed so unevenly, and why did no country leave the eurozone? Stefanie Walter attemps to answer these questions by focusing on how the relative cost of different crisis resolution options shaped eurozone crisis politics in both deficit and surplus countries. Building on a large-scale data collection, she combines macro-level analyses that put the eurozone crisis in comparative perspective, analyses of crisis resolution preferences of 716 interest groups in three deficit and three surplus countries, and comparative case studies of crisis politics in these six countries. The analyses show that vulnerabilities to different crisis resolution options shaped crisis politics both on the country level and within countries. Walter generates an encompassing picture of the distributional politics of the eurozone crisis and a better understanding of the constraints under which policymakers have operated in their attempts to resolve it. She demonstrates that it matters whether policy options are considered in isolation or in the context of trade-offs. Some policy choices that seem puzzling at the outset are much more readily understood once the alternatives are considered.
Stefanie Walter is Professor of International Relations and Political Economy at the University of Zurich. Her research examines distributional conflicts, political preferences, and economic policy outcomes related to globalization, European integration, and financial crises. She is the author of Financial Crises and the Politics of Macroeconomic Adjustments (Cambridge 2013) and coauthor of The Politics of Bad Options (forthcoming with Oxford University Press).