Puzzled out? The unsurprising outcomes of the Greek bailout negotiations

Darren Lim, Michalis Moutselos, Michael McKenna

    Research output: Contribution to journalArticle


    While to date the Eurozone debt crisis is one of the most important and consequential events in world politics of the twenty-first century, the actions taken by states to negotiate a cooperative resolution do not seem particularly puzzling. In this article, we employ the analytic explanation approach to process tracing to test whether the most protracted and high-profile case – negotiations between creditors led by Germany, and Greece as debtor state – indeed validate three central hypotheses of basic cooperation theory regarding the sources of bargaining strength. We conclude that while bargaining leverage did emerge primarily from the ability to withstand non-agreement, the weaker Greece was able to achieve marginal concessions reflecting terms that departed from Germany’s initial win-set. This leverage stemmed however not from a threat based on domestic political constraints, but from the realization that Greece’s structural economic weakness rendered the strictest austerity measures untenable. The policy implication is that the credibility of the weaker side’s negotiating signal arose not from domestic politics, but the impartial assessments of international technocrats and private rating agencies.
    Original languageEnglish
    Pages (from-to)325-343
    JournalJournal of European Public Policy
    Issue number3
    Publication statusPublished - 2018


    Dive into the research topics of 'Puzzled out? The unsurprising outcomes of the Greek bailout negotiations'. Together they form a unique fingerprint.

    Cite this