Pitt hosts discussion on European Union debt crisis

As the European Union finds itself deep in an international debt crisis, three professors… As the European Union finds itself deep in an international debt crisis, three professors foresee positive outcomes for the economic union.

Pitt’s European Union Center of Excellence sponsored an hour-long video conference in David Lawrence Hall Tuesday during which EUCE Director Ronald Linden and representatives from Pitt, the University of North Carolina and the University of Illinois discussed the current economic situation in Europe.

The EUCE is one of the six studies centers in Pitt’s University Center for International Studies. According to the center’s website, EUCE promotes the study of the European Union and its relations to the United States. Through the center, students can receive certificates in European Union Studies and West European Union Studies.

In 2001, Greece joined the eurozone, a monetary union whose members share a common currency as part of their membership in the European Union.

By 2004, however, it was revealed that Greece’s deficit had never been below 3 percent of GDP, the level required for countries to join the eurozone. After years of undergoing austerity measures such as cutting pensions, eliminating benefits for government workers and reducing other social spending, the Greek economy began to contract quickly in 2009. The government responded with further measures in attempts to align spending with revenue, but the decisions were met with violent riots in the streets of Greece.

Though the Greek government accepted a German bailout last year, the country still teeters on the verge of bankruptcy.

“Who’s being bailed out? It’s not the people of Greece. It’s the banks,” said Christiane Lemke, a visiting political science professor at UNC from Leibniz University of Hannover.

Lemke labeled the debt crisis a “crisis of legitimacy.” She said she has hope that the EU will come out of the crisis with a new form of economic governance.

Lemke said that the prevalent protest movements across Europe as well as the resignation of several European governments — such as that of former Italian Prime Minister Silvio Berlusconi — in the past few months could be a sign that the debt crisis is causing Europeans to lose faith in private banks and the ability of the public sector to regulate them.

Alberta Sbragia, Pitt vice provost for graduate studies and former director of EUCE, said that she thought the European debt crisis might push the countries of the EU toward greater integration.

Sbragia warned that the popular calls for an end to the EU were short-sighted and that the crisis could have a major effect on the U.S. if it does not end well. She said roughly half of U.S. corporate profits come from Europe, and that percentage could be jeopardized if the crisis isn’t solved.

Even though most of the 30 Pitt attendees at the video conference were majoring in political science or economics, Sbragia said that the European debt crisis should matter to “all students who are interested in the world.”