KAFP 6315 - The Political Economy of Public Debt in Europe

This course studies the issue of public debt in the context of Europe – both as a phenomenon that

increasingly affects European countries and as a central problem in European integration that featured

prominently in Europe’s greatest economic crisis to date. The starting point for the discussion in the

first week is the orthodox economic view of the causes of and problems generated by public debt.

The rest of the course deconstructs that orthodox view through a political economic analysis to

highlight how much of what economists take for granted is actually rooted in political decisions,

conflicts and compromises, and to offer a range of alternative interpretations of what public debt is,

where it comes from, what problems it causes, what solutions are possible and how it should/could

be handled to cause fewer problems within European integration. The first big block of the course

shows that public debt is the corollary symptom of the challenges that all prosperous states in Europe

face in the current stage of late capitalism. The second big block explores the diverse experiences of

European states with debt – explaining how the severity of the problem varies with countries’ fiscal

governance structures, with their ability to renegotiate their redistributive settlements, and with their

capacity to collect taxes. The third block turns to the role that public debt has played in European

integration. It first investigates the part that public debt played in the euro crisis, then studies the ways

in which Europe has tried (and failed) to rein in public indebtedness through a series of ever-more-

complicated rules and procedures, and finally explores the ways in which the public debt of member

states might be made less dangerous for the union as a whole. The fourth block turns to the question

of sovereign debt markets to explain who owns governments’ debt and with what consequences. The

final class concludes the course by asking what lies ahead for the indebted governments of Europe.

The course will rely on a wide range of books, book chapters, journal articles and policy pieces, all of

which are available in the library. Due to copyright reasons, (extensive sections of) books cannot be

made available on Moodle. Please note that some books (Streeck, Hallerberg et al.) might only be

available in hard copies in the library.

This course relies mostly on lecture, discussion, and reflection papers. Students are expected to have

done the assigned readings before coming to class in order to enable them to participate actively in class

discussions and to ask informed questions and express opinions on issues related to current events.

The grade is going to be based on performance in class debates (group work – 20% of total) and

reflection papers (individual work – 80% of total).

Students are asked to contribute to class discussions by engaging in small debates at the beginning

of each class in weeks 2 through 11. Each week, eight groups (of four students each) are asked to take

a clear stance on a (provocative?) question/viewpoint and underpin it with five arguments.

In preparation for the debate, the members of the group are asked to (1.) get in touch with one

another; (2.) agree on a common stance for the group; (3) come up with up to five arguments for their

stance; and (4) upload a single slide with their stance (max one sentence) and arguments (max five

short bullet points) by 8pm the previous night. I will show the eight slides at the beginning

of the lecture and give (the spokesperson of) each group 1 minute to present their stance. The rest of

the class (not taking part in that week’s debate) will vote on which group’s stance they find most

convincing. Obviously, the readings assigned for the given week help to work out your stance, but

your stance absolutely does not have to coincide with the views expressed in the readings (or with the stance implied

in my choice to assign the readings). I encourage you to think critically about what the readings say and

come up with your own stance and own list of arguments. So please feel free to rely on

knowledge/experience/hunches acquired outside of this course.

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Students are also asked to submit TWO reflection papers (one each after the conclusions of Parts 1,

2, 3 and 4). In no more than 2000 words, reflection papers should answer the question by identifying

the main themes of the relevant readings, the lectures and the class discussions and explaining how

they all add up to an answer to the question asked. Rather than extensively summarizing what we read

and discussed, reflection papers should focus on how the argument of the different pieces reinforce

or nuance one another. Reflection papers can take a stance in accordance with but also against the stance

advocated in the readings, the lectures and the discussions. The important thing is that they reflect

thorough knowledge of the themes discussed in each and make a clear argument using those themes.

This is an individual assignment. Please refrain from collaborating with your fellow students and/or

with ChatGPT. The questions and deadlines are the following:

Reflection question 1. – due Friday, March 20

Reflection question 2. – due Thursday, April 30