The new book entitled: ‘Capitalising on constraint: Bailout politics in Eurozone countries‘ has been released by Manchester University Press. Among the authors of the book, ELIAMEP’s Research Fellow, Stella Ladi, Reader at Queen Mary University of London and Associate Professor, Panteion University.

During the Eurozone crisis, five governments (Greece, Portugal, Ireland, Spain and Cyprus) in economic difficulty received assistance from international lenders on condition that certain policies specified in the Memoranda of Understanding were implemented. How did negotiations take place in this context? What room of manoeuvre did the governments of these countries have? After conditionality, to what extent were governments willing and able to roll back changes imposed on them by the international lenders? Do we find variation across governments, and if so, why?

This book addresses those questions. It explores the constraints on national executives in the five bailed out countries of the Eurozone during and beyond the crisis (2008-2019).

The book’s principal idea is that, despite international market pressure and creditors’ conditionality, governments had some room for manoeuvre during a bail out and were able to advocate, resist, shape or roll back some of the policies demanded by external actors. Under certain circumstances, domestic actors were also able to exploit the constraint of conditionality to their own advantage. The book additionally shows that after a bail-out programme governments could use their discretion to revert some measures when the electoral benefits were significant and the cost vis a vis the creditors was low. It finally explores the determinants of bargaining leverage – and stresses the importance of credibility.

Relying on in-depth description of negotiations between the domestic and international actors; and on the coding of all-important policies adopted under conditionality, this book is an essential analysis of what really happens behind closed doors during and after a bail out.  It provides an insight on the potential but also on the limits of conditionality which can inform the design of international and European lending during future crises such as the Covid-19 crisis.