ILPC 2027

 The governance of the Eurozone debt crisis has been characterized by the asymmetric imposition of the costs of adjustment on debtor countries. In addition to the implementation of austerity measures, Eurozone countries targeted by private bondholders also implemented important liberalising measures of their industrial relations systems. In particular, measures have been introduced to decentralise collective bargaining to the level of the firm and regulations have been implemented for removing (some) of the legal restrictions on the ability of management to dismiss workers. These measures were linked to the award of financial bailout packages. Banks from creditor countries, in contrast, have largely been protected from their exposure to Ireland and Southern Europe. What accounts for this outcome? This paper presented an ideational perspective on the governance of the Eurozone crisis. Ideas are important for two reasons: they constitute cognitive scripts that guide strategic behaviour by enabling state officials to interpret events around them and, in turn, delineate the range of considered policy options; the influence of ideas over outcomes reflects the process by which they are framed, thereby enabling policy-makers to build support for new policy proposals at the expense of other interpretations. In this paper, we focus on the influence of German Ordoliberalism at two levels. First, the concept of Ordoliberalism has enabled the Merkel government to frame financial assistance in terms of structural risks associated with the potential collapse of the Euro, not in terms of social solidarity. Second, the concept of Ordoliberalism has contribution to an interpretation of the solutions of the financial crisis in terms of supply side adjustment at the expense of aggregate demand policies.