Why is the Greek debt crisis so extreme?

There are three crises in the Euro at the moment. Firstly, a competitiveness crisis: many countries allowed inflation to exceed German levels from 2000 to 2007, making them pretty uncompetitive. Next, a banking crisis: the private sector in several countries borrowed too much before the recession. This led to housing and construction bubbles, and helped cause the competitiveness problem. Finally, a government debt crisis, where governments borrowed too much. In fact, only one country started the recession with a serious government debt problem – Greece. The fiscal problems in Ireland and Spain are the result of the public sector bailing out the banks following the banking crisis. So the crisis is so extreme for Greece because its the only country that has all three problems at once. In addition, they reinforce each other. Because it is uncompetitive, Greece can’t solve its debt problem through growth. A partial default on its government’s debt has worsened the position of Greek banks, which owned part of this debt.

How beneficial have the successive austerity packages been for the Greek economy?

There is a strong argument that they have not been beneficial at all. Some austerity in Greece was clearly required, but pushed too far too soon and there was a danger that the economy would collapse, and the electorate would revolt. That is exactly what has happened.

How likely is a Greek exit from the Eurozone now?

It’s certainly possible. There is a game of chicken going on between Greece and the rest of the Eurozone, and Germany in particular. Both have a lot to fear if Greece is forced to exit, so each side is hoping the other will back down first. The problem with such games is that if neither side gives enough, the outcome is worse for everyone. If Greece leaves, could contagion spread to other countries? With great difficulty. Although Greece is the worst case country, the same conditions could easily arise elsewhere. The key to preventing contagion is the European Central Bank. Eurozone national governments cannot print their own currency, and so are at much greater risk of default on their debt. The ECB needs to start acting as though it were each country’s central bank, underwriting government debt so that investors continue to lend to periphery countries. It should also strengthen the vulnerable economies by raising German inflation targets relative to the rest of the Eurozone. This will make the peripheral countries more competitive, enhancing their growth prospects.

For the rest of Europe, would it be better for Greece to stay or leave?

If Greece was forced out of the Euro, it would default on its remaining debt, which is largely owned by Euro economies. Exit would also increase the risks of contagion. Banks in some periphery countries would be particularly vulnerable. Probably the only positive thing would be that the threat of contagion might finally force the ECB to underwrite the fiscal positions of the periphery countries, and for the Eurozone to develop a banking union to deal with insolvent banks. The benefits of Greece leaving are far less clear. Some say that using additional funds to support Greece within the Euro is throwing more money at an intractable problem, but that does not make much economic sense. There are certainly serious structural problems in Greece, but it is better to change these with a combination of carrot and stick, rather than with overwhelming austerity.

The British have never been quite sure what to make of Europe and tend to flit between contempt and envy. But since the Eurozone began its descent towards accidental suicide, the tabloids have shifted to a weirder mix of delight at having been proved right that Britain never should have got involved in the first place, and outrage that we may be dragged with the rest of the continent anyway. Now, the focus is on Greece’s slide towards failed-statehood, and on Germany’s new found place as Europe’s political kingmaker, deposing governments in Spain and Italy at will and calling the new French President Francois Hollande to Angela Merkel’s knee barely a few hours after he took office.

While the right-wing side of the British press gloats and rants, the hacks who supported the European project from the beginning have been left with really very little to write about beyond depressing post-mortem analyses of the near-lifeless economies of southern Europe. The elephant in the room seems to be what the UK should actually do to try to stop complete euro-meltdown, or at least how it might save itself. No one seems to know.

Victoria Hislop falls back on omens as the only hope Greece has left, and tells of how the clouds parted to allow a rainbow to fall on Athens during her last visit, mixing Greek and apparently Irish myth to express her hope that ‘Greece can find its pot of gold’. Peter Hitchens geared himself up for overdrive though, calling Germany an empire in all but name and accusing it of colonial exploitation of Europe’s weaker southern states. Much of the rest of his Daily Mail column reads like an attempt to clear out all the insults for the EU he has saved up over the years and now needs to get rid of. He calls the EU a ‘stupid empire’, and at that a poor substitute for the USSR’s evil empire, with a weird mix of paranoid outrage and sarcasm. The EU is apparently also a mad hospital, and once hapless member states are incarcerated within, ‘the best thing to do is leave. If you can’t get out, you will probably die’.

Andrew Rawnsley points out the absurdity of Cameron now joining in with Obama, Hollande, and just about the rest of the world to convince Germany of the insanity of the very same austerity drive that he is now defending to the UK electorate. He has gambled, apparently correctly, that the British public will be so delighted to watch the Euro fall apart that they will not even notice the contradiction.

Paul Seabright reminds us in the Guardian that however ludicrous the amounts of money wasted by the Greeks, both the money they spent and the things they bought came from the rest of Europe. Who the hell in Germany thought that Greece needed to be the 4th biggest arms importer in the world? The rest of Europe was sucked into the credit boom just as much as Greece. Everyone else reaped just as much money as they did, and now we deserve to take our share of pain as well.

Proposition:

Part of the reason OUSU exists is to work alongside common rooms. This year we have worked hard to ensure that our undertakings are complementary to their work: we have focused on providing common rooms with tailored support, information, and advice. This has included an intensive programme of officer training, multiple information sessions, regular consultation, and one-to-one welfare support.

In order to avoid duplication we have also worked to facilitate campaigns that are necessarily centralised, whilst ensuring that they are relevant to students and shaped by the priorities communicated to us through common rooms and OUSU Council. The main policy areas this year have been: supporting graduate students, student teaching awards, mental health awareness, campaigning for a living wage, improving the conditions of student residents, and raising academic standards.

Furthermore, in spite of the devolved nature of the University many decisions are still made centrally. OUSU can focus at a University level, providing representation and a strong student voice after consultation with students. All of this helps us to support effective student representation in Oxford, enhancing and supporting the work already carried out by common rooms.

A criticism oft levied at OUSU is that we do not take enough time to consult students; this year OUSU has made it a priority. We conducted the final review of reports focussing on teaching and consulted hundreds of students; using this to set OUSU’s academic priorities. We have also tried to give controversial motions a full airing: the White Paper Response was debated in multiple Common Rooms before it was taken to Council and several drafts were sent round the whole student body for input. The full-time officers have visited over sixty common rooms this year and met one-to-one with hundreds of students. We have also made the Council agenda extremely public. OUSU is working to make sure we are a more representative and accountable union.

As affiliation fees have been abolished the only change brought by disaffiliation is the removal of a common room’s voting rights. Since February last year a host of MCRs have re-affiliated to OUSU and graduate issues have become one of OUSU’s priorities. With the support of these MCRs, we have repeatedly won on graduate issues. Affiliation gives common rooms direct influence over OUSU’s policies and actions, thus keeping us accountable. It also gives the student union collective, unified bargaining power so that we can win on the issues you really care about.

Opposition:

The nitty-gritty business of student politics happens in the JCR. Facilities, welfare, and academic issues are all handled in college. With the day-today concerns of students managed so close to home, it is hard to justify a further, more distant organisation in a collegiate university.

That is not to say that we don’t need some kind of representation for the student body as a whole, but the real question is not ‘what does OUSU do?’ but ‘what does OUSU do that could not be done, in some way, through JCRs?’ A straw poll of students in hall this morning revealed nobody felt particularly strongly about OUSU, and several didn’t know what it was. Whether you put it down to bad PR or just lack of effect, this isn’t the hallmark of a successful students’ union.

Just look at the elections that are, after all, OUSU’s justification for representing us at all. The most I remember of the last one is the over-blown centrespreads in the OxStu and the occasional poster on Turl Street. Short on policy, short on personality. No student I know actually felt like it would make a difference to them. The entire process left us disengaged: even with internet voting the turn-out was 19%. Hardly a democratic mandate. The ‘hackocracy’ criticism is an easy one to level, but it contains a grain of truth: it is hard to see how OUSU is not run for hacks, by hacks.

Compare that to the local democracy of the JCR. Presidential elections are hard-fought and engaging: Corpus even managed enough interest in the process to have a plant both run and be murdered. More importantly, if I vote in a JCR election, or even in a JCR meeting, I know my voice is being heard on an issue that matters to me as I represent a good couple of percent of the electorate. That gives a sense of empowerment that OUSU completely fails to provide. The organisation receives £200,000 from the university each year, but surely that money would be best spent by those closest to the students they stand for. OUSU is the European Parliament of university democracy: distant and inscrutable, disengaged, and – according to most of the electorate – pretty much irrelevant.

The real powerhouses of university politics are the JCRs, their committees and presidents. They are transparent, approachable, and we can see them making a real difference in our day-to-day lives. Surely these truly democratically elected people should be the ones we trust to communicate with the University and the outside world, without the expense and bureaucracy (and, dare I say it, hackocracy) that comes with an external organisation.

For too long, higher education has been trapped in a paradigm of success which places undue emphasis on research and relegates teaching to little more than an afterthought. Both for universities competing at a national level in the league tables, as well as for academics competing within an insti- tution, a focus on research is currently the path to the top. And students are losing out. The first solution is simple: we need to find better ways of measuring teaching quality across the UK, so that students can make an informed choice when choosing where to study. One obvious measure of teaching quality is to measure outcomes, by trying to establish how much value a teacher has added to you over the course of your interaction. This is already done at primary and secondary school levels and allows for far more accurate league tables.

However, measuring outcomes at the university level is hampered by the absence of standardised testing. We can’t just simply measure teaching quality based on the difference between A-levels and degree classification because different institutions are more or less generous with their grades. Different degrees are not only different in classification but in content too. Try to standardise degree classifications and you have your work cut out. Try to standardise degree content and you face an unwinnable battle because higher education is subjective: you will never get two economists to agree what should constitute a degree in economics.

Given the difficulties in measuring outcomes, many have looked to the quantity, timeliness and quality of feedback as an indicator of teaching experience. Students can have famous lecturers and small classes, but if their work isn’t being marked, their learning is limited. Though this is a far from perfect measure, it is a decisive improvement on the ambiguous ‘student surveys’ currently used by universities and the league tables. 

The second solution is harder: we need to reconstruct the incentive structure in academia so that it is conducive to good teaching. At the moment, it is publish or perish for academics at most British universities, where promotion and reputation is based entirely on your research. Should an academic choose to dedicate their career to good teaching, they must make a vast sacrifice of both income and prestige unacceptable to most. Furthermore, while universities often have elaborate frameworks and support networks for research, nothing similar exists for teaching. Teaching matters. When the new cohort arrives later this year, many will be spending over £9,000 for their education. With the increase in tuition fees, the role of teaching will have to be recognised by institutions because students, over time, will be more discriminating about where to go. Teaching in higher education is not a lost art, but regard for it is a lost tradition. Students need to stand up for their education and demand a change.

According to a White Paper released last week, the Government is planning to reform the much-maligned ‘anti-social behaviour order’, or ASBO. Proposals include making it possible to obtain orders within hours at a lower standard of proof, and giving police the right to disperse groups of two or more people without prior notice. With the revelations surrounding the Leveson Inquiry still dominating the news, the government has been allowed to present the changes without great criticism. But these proposals are a massive step in the wrong direction, from a dire initial standpoint. Worse still, they exemplify a political elite out of touch with those growing up in urban Britain.

The underlying logic is stupid. Prevent a group of young people – the main perpetrators of ‘anti-social behaviour’ – from doing something in one place and they’ll do exactly the same things somewhere else, further from the reach of the police. In no way does it address the causes of the problem. An ASBO does not ask why people are behaving the way they are. It does not ask why people are standing on a street corner with nowhere to go. It does not ask why these people are not at home, or in school, or in work. If a child is not in school, banning them from a shopping centre will not make them go back into the classroom. All behaviour orders succeed in doing is further alienating those who already feel disenfranchised, abandoned by the political class, and harassed by police.

In the Netherlands, a lower drinking age for alcoholic drinks which are under 15% allows teenagers into pubs and bars. It gives them somewhere to be, a feeling of adult responsibility and a mature attitude to alcohol. We provide ASBOs instead. The point of ASBOs was never to confront gang crime, youth unemployment, poor education, or the removal of anywhere for young people to go. All they were meant to do was sweep the armies of yobs far far away and keep them from intimidating honest, upstanding voters.

Behaviour orders are the result of the middle classes legislating for the middle classes. They demonstrate the gulf between those growing up in our inner cities and those, sometimes not so far away, who are dictating their future. Politicians simply do not relate to the young people who are the main subjects of behaviour orders, for whom they are not ‘badges of honour’ but an unwelcome restriction on their civil liberties. Clearly we don’t need more criminalisation: we need politicians brave enough to face up to the real issues that are the causes of ‘anti-social behaviour’. Proposals like these are just sad evidence that such people are hard to come by.