CEU eTD Collection

Narratives of Financial Crisis, and the and Crisis, Financial of Narratives In partialIn Estonia, Estonia, Department ofInternational Relations and European Studies fulfil ment Supervisor: Professor BelaGreskovits Ireland Ireland

of the requirementof the Central European University Word count: Budapest, Hungary By Allan Vissor Submitted to and Iceland Iceland and 2013

s fors the degree Masterof of Arts 17 ‟ 064

Compared

ir Factors: ir Factors:

CEU eTD Collection Bibliography Appendix Conclusion Chapter 3: Analysis Chapter 2: Narratives crisis ofthe Chapter 1: Methodology Introduction 3. 2. 1. 3. 2. 1.

Iceland Ireland Estonia Studyfactors andThe independent puzzle variables Research and questions design

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53 43 33 17 17 15 68 67 64

7 7 7 3

CEU eTD Collection 6 5 4 3 2 1 and Ireland‟s and stasis, discourse as to principalcrisis causesofthe problem the of causes the into investigation bu factors external by caused be to perceived initially was but external I changed. discourse investigation Irish The politica cris economic steepa had countries these that observation the by driven researchis a used Ireland responses crisis. tothe early of effects the see already can one because Europe in crisis the study to ripe is time The euroz M European the of design “ US the in it causes Crisis Financial Global The Introduction

uooe Crisis Eurozone Csaba 2012 Csaba 2010. Grauwe De Scharpf2011 2012 Krugman 2008 Brunnermeier e.g. Stiglitz e.g. one authorities

s

of the crisis the of l and Iceland and

ore f otat t Etna n Iead o rw hoeia conclusion theoretical draw to Ireland and Estonia to contrasts of source reactions

. 2010. initially perceived the causes of the crisis to be external but after formal formal after but external be to crisis the of causes the perceived initially

3 . in contrast to Ireland to contrast in

o causes of s the as known is crisis the Europe In . .

” .

to the problem the to

in the United States United the in . The causes of the Eurozone crisis have been attributed attributed been have crisis Eurozone the of causes The 5 n Estonia n . It is not a not is It

as well as poor My

and

research is a comparison of isacomparison research ntr Union onetary

h eeto of election the has

it be domestic. fully was

the dominant di dominant the

en protracted been and the and -

fledged comparative study because the Icelandic case is case Icelandic the because study comparative fledged

fiscal also initially also 1 , how the crisis unraveled crisis the how , Iceland‟s situation as having different degrees of of degrees different having as situation Iceland‟s

ir 4 policy urgltd iaca mres an markets financial unregulated ,

In sum, narratives about the crise the about narratives

3 nw oenet n ac 21 te pub the 2011 March in government new a

h new the

scourse did not change not did scourse n . believed that the that believed ational governments “ Estonia‟s be can conceptualized situation S Eur tudies

discourse stasis and change and stasis discourse in opean Sovere opean government t aft t

hav er a er be pbihd bu the about published been e

in the US the in

change of government of change

causes of the crisis were crisis the of causes i gn Debt Crisis Debt gn s have been have s discourse 6 . .

In Iceland the crisis Icelandthe In 2

and responses toresponsesand to d

the in flaws viewed the the viewed failures by by failures is but the but is

different. Estonia, ” or the or ” s . The The and and lic lic ir

CEU eTD Collection 11 10 9 8 7 loosening constraints and institutional cultural (Figure questioning 1). coalition interest eroding are there when stasis policy explain also can factors discursive (RI interests and and institutionalism stasis policy of theory The theories different toconceptualize factors. (HI) and In use scholars) views the also and Toidentify althoughis alsotryinglessons ofthe crisis. divided, deeply tolearn the seem is Ireland My discourse change.

Schmidt 2008, 2010. 2008, Schmidt & Raudla2012. Hope &Nölke 2009. Vliegenthart

Ibid. 402. & Raudla2012, Hope explaining

data gathereddata by rational , study, then, study, oiy sta policy change s to be ignoring its ignoring be to s

.

To find out whether the views of the elites are shared by the common people I people common the by shared are elites the of views the whether Toout find rigt lanfo past from learn to trying

narratives about the crisis amongthe crisis the about narratives 8

, ntttoa osals H) and (HI) obstacles institutional ), stemming

the sis. (HI) 10 helps to uncover weaknesses in Estonia‟s politico Estonia‟s in weaknesses uncover to helps . Hope & Raudla & Hope . cha

D sociological ,

of other domestic actors (e.g. businesses, businesses, (e.g. actors domestic other of iscursive factors can explain policy change when there are entrenched entrenched are there when change policy explain can factors iscursive public opinion public nge

rm the from

or stasis or mistakes and walking on a slippery developmental slippery a on walking and mistakes

in the narratives the in (SI) literature of the four “new institutionalisms” institutionalisms” “new four the of literature 11 polls

mistakes and be better prepared for the future, Es future, the for prepared better be and mistakes maintain that maintain

change is an underdeveloped area area underdeveloped an is change n dsusv institutio discursive and , such as theEurobaromete

4

e lites I examine speeches of speechesI examine lites

I will draw from the from draw I will DI can be used to explain policy change policy explain to used be can DI cul ua bikr (I. But (SI). blinkers tural nalism trade unions, unions, trade - r. economic system economic

theory of policy stasis stasis policy of theory (DI) 9 . Prime Ministe Prime the opposition, opposition, the I path of discursive discursive of use – obstructive 7

. historical h four the Iceland, . While While tonia tonia will will r s, s

CEU eTD Collection 14 13 12 Tindall by presented possible three use I narratives the in difference the determine to order In Source Figure 1. Iceland. stas discourse factorsinternationaleconomic explain and factors economic liter existing the by important considered factors other two also will I addition In factors. discursive and sociological rational, historical, into them divide I change and stasis discourse explain that factors potential conceptualizing In

Tindall2009. Ibid. 1992; & Haggard Kaufman Avdagic2010.

: Hope &: Hope Raudla

. 12

In short, I will look at how historical, rational, sociological, discursive, sociological, rational, historical, how at look will I short, In 14 I te “b the In . 13

.

usiness

- as - usual 5

fae h svrt i mnmzd n the and minimized is severity the frame ” is and change in Estonia, Ireland and change inEstonia, is and ature –

nentoa factors international framings of crises of framings

consider consider and and

CEU eTD Collection 16 15 weight various factors study insolving of chapter third the In Iceland. and Ireland Estonia, in narratives the describe analyzing. be will I factors the list and conceptualize also will questio I difference isthatthey Ireland to important is it why is This change. a about bring could who acto of number Raudla and Hope alternative economicmodels. capacities economic of underdevelopment me capacit policy economic Estonia‟s of and rational, factors sociological historical, that argue They 2009. in retrenchment fiscal chose Estonia why Rau “c the In exogenous. be to opportunity considered are causes the and acknowledged t considered are causes n the first chapter I will will I chapter first the n

Hope & Raudla2012. Hope &2011.Kattel Raudla asure dla and Katteldla and ns, n Iceland and .

hs ocuin a as b ue t epan icus sai i Estonia in stasis discourse explain to used be also can conclusion This explain explain ” and frame the causes ismaximized severity be are considered to rs in public discourse becomes s becomes discourse public in rs 15 16 the research puzzle and puzzle research the

argue of the theory that all

ocue ht soi eepiis cs wee n sml plt the polity simple a in where case a exemplifies Estonia that conclude –

experienced a change, discourse whereas Estonia hy r as sml polit simple also are they fed b eoeos I te “c the In exogenous. be o

the ie n vriw f the of overview an give

neoliberal e making ies

the researchthe puzzle. discours

discursive institutionalism can institutionalism discursive describe ae t mosbe o tr a icsin about discussion a start to impossible it made 6

o constrained that there are simply no actor no simply are there that constrained o e wt cmuiaie icuss but discourses communicative with ies

e it impossible to choose any other policy policy other any choose to impossible it

ii a a threat a as risis which i ndependent research resulted in the underdevelopment the in resulted

compare the Estonian case to case Estonian the compare

In the second chapter I will will I chapter second the In design, design, and dependent and ” frame the severity is is severity the frame ” did not. did articulate research research articulate effectivelyexplain I will analyze the the analyze will I endogenous

risis as an an as risis variables –

.

the the the . s I CEU eTD Collection 20 19 18 Methods. Research and 17 The question about narratives the discourse? communicative a with m The the de or outcome the on different are but variables independent their to according category same similar “most the use to going am I n qualify would research comparison” “controlled goi am I Chapter 1: ew variables, hypothesis,causal

Ibid, Ibid, Ibid, George& Benne Small parts in this subchapter were also used in 2013 in my final papers in the courses Debt & Democracy Democracy & Debt courses the in papers final my in 2013 in used also were subchapter this in parts Small research pendent variable. 252 75 ain research ques research ain 2. 1. .

is . ng

:

17 h ow was thecrisis perceived elites among the

puzzle is that that is puzzle Methodolog The th compare to d Research t 2005, t 2005,

puzzle the 81

20 as a “heuristic case study” the aim of which is to “inductively identify identify “inductively to is which of aim the study” case “heuristic a as

tion . financial crisis in Estonia, in crisis financial

18

. esign and in

is of classification the to According y while css f Estonia of cases e

:

w

mechanisms, and causal and paths.”mechanisms, and hat explains discourse stasis and stasis discourse explains hat

dependent variables dependent Or in other words: other in Or soi ad rln hv cmo caatrsis ( characteristics common have Ireland and Estonia ” cases research strategy in which two cases fall into the into fall cases two which in strategy research cases questions 7

Iead n Iceland and Ireland ,

Ireland

w hat factors explain the differences the explain factors hat

and the common peopleand thecommon

and Iceland and

ere n Bennet and George change in a simple polity polity simple a in change ?

ih h mto of method the with The related ?

research research 19 small small

my in CEU eTD Collection 25 24 23 22 21 state” capitalism”. of it place that features has economy framework theoretical capitalism of varieties been have Ireland and Estonia study E small advanced the to contrast stark in is the in liberalize cautiously to began 1958. it Both Iceland‟s319‟000. is population t and million 1.3 is Estonia of population The economy. their are Iceland and Ireland and Estonia Letelaborate. me approach variables. forallows me some tocontrol independent and crisis the to reactions retrenchmentfiscal siz

Wade131. 2012, & Sigurgeirsdottir O‟Riain 2000, 2008. O‟Riain2000, 84. Hardiman2012, 2001 Soskice and Hall 1985. Katzenstein re , ae development, late e, gained independence and Ireland embarked upon a serious dev serious a upon embarked Ireland and independence gained countries countries -

Icela a bhn te ucs soy f h Cli T Celtic the of story success the behind was Sweden, Norway,Sweden, Denmark, th nd was one of the poorest placesin poorestWestern the of one was nd Europe are O‟

Riain

, simple po simple , late developers developers late .

25

elbrl policies neoliberal

argues that while developmentalism developmentalism while that argues

diffe

lities, communicativediscourse lities,

et artvs bu it about narratives rent

aeoie a lbrl akt cnme (Ms i the in (LMEs) economies market liberal as categorized

– “clearly within the Anglothe within “clearly

1960s. Estonia joined the capitalist world system in 1991 when when 1991 in system world capitalist the joined Estonia small states in terms of their population and the size of size the and population their of terms in states small e Netherlands, Belgium,Netherlands, e Austria uropean sates which Katzenstein which sates uropean 21 ,

svr GP contraction GDP severe a The start of the development of these countries these of development the of start The 8

23 Hardiman .

gr i iger (Table 1 (Table - 24 ) American liberal market model market liberal American te 90, h 20s were 2000s the 1990s, the n

or the “flexible developmental “flexible the or

they

at the start of Worldstart the at WarII as ht the that says

hat of Ireland 6.4 million. million. 6.4 Ireland of hat in Appen in showed different showed political elopment path only after after only path elopment

and Switzerland and ,

mlmnain of implementation dix 22

s ) hskn of kind This . elected for his for elected rs political Irish .

. It .

CEU eTD Collection 34 33 32 31 30 29 28 27 26 coun that GDP the roughly had with 2006 and experienced Estonia housing cause self crisis bubblebutthemail of the was a had also Iceland bubble. housing the was Ireland and Estonia in contraction GDP the of Iceland‟sd GDP10%. (in 2008 Between holy pillars regime, board currency budgetarydiscipline. strict The a follow and euro) the to later and Deutschmark the to pegged Ka & characterize been has Estonia increasingly neoliberalthe2000s. in li increased characterizedby

All statistical data in this thesis from from thesis this Worldin data All statistical stated. if Eurostat, not otherwise or Bankdatabase Th 2012. & Kattel Thorhallsson Ba an Reinhart & Nielsson Torfason 27. 2012: Raudl Bohle Feldmann2006.

cumulative percentage changes) percentage cumulative

orhallsson & Kattel 2012. & Kattel orhallsson kker and Gulde 2010. kkerGulde and re te credit the tries a te ags in largest the had ttel a &2011,Kattel 178. a &Greskov 28 downturn was the steepest the was downturn

by Bohle by

d Rogoff 2009, 245. Rogoff d 2009, of Estonia‟s economy.

50% increase in housing prices in that period. that in prices housing in increase 50%

and 2009 and

r its 2012. its eal housing prices inc prices housing eal -

to & Greskovits & one of the of one

iminished iminished - D rto of ratio GDP

budgetary discipline discipline budgetary rae n credit in crease

Estonia had the s the had Estonia

berali d as a liberal market economy market liberal a as d

biggest by 30 sm. Kattel&Thorhallsson 29

31 . Estonia decided to adopt a fixed exchange rate ( rate exchange fixed a adopt to decided Estonia .

6.8% in 2009 and another 3.0% in 2010. in 3.0% another and 2009 in 6.8%

in those Central and E and Central those in . Estonia Estonia Ireland reasing surges - to econd largest GDP contraction in contraction GDP largest econd - D rto eoe h crisis. the before ratio GDP and a pro a and

9 had the fourth steepest contraction steepest fourth the had between

by 150% by

in housing prices in the in prices housing in portional income tax income portional -

lending by thebanks 2003 . 33

IMF economists IMF In comparison, In 27 astern European (CEE) countries countries (CEE) European astern 26 -

and neo and 2008

argue that also Iceland became arguealso that a te highest the was - liberal by Th liberal world between 2002 between world

the US and Spain and US the Among 34

. became Europe 32

The main cause main The have found have

in the EU EU the in orhallsson

the the the - (50% in in (50%

initially 18.3 % % 18.3 three three CEE CEE

that –

CEU eTD Collection 40 39 37 36 35 construction increased developers capital ease to 2008. prices tripled had 2002 Between higher growthcredit c from differ clearly states Est in growth credit shared is bubble housing the about argument The bubble. housing a experienced Estonia short, In sector. estate real crisis. the during countries Baltic the in most the decreased GDP and demand domestic that and demand domestic in increase the with correlated was credit of inflow the that show authors rose ratio credit 20

Honohan 2009b, 11. Honohan2009b, O‟Riain2008. Honohan2009a. Reinhar 5. 2012, Bohle 03 and 100% in 2008) in 100% and 03

38 4% i 2008 in (40%)

The study showed that Estonia was overheated with credit and m and credit with overheated was Estonia that showed study The

The bubble was not onlynot was bubble The gains tax in the beginning on 2000s and provided tax incentives to real estate estate real to incentives tax provided and 2000s on beginning the in tax gains t and Rogoff 2009, 245. Rogoff t and 2009, on odtos a conditions loan

from 20% to 40% and the share of share the and 40% to 20% from 39 A a eut h result a As .

- 2006 the housing prices in prices housing the 2006

37

. The credit toGDPThe credit Ireland jumped from of ratio 113% 2003to220%in in na a 4% n 8% f t a flowi was it of 80% and 40% was onia ( In . Figur from from

by Bohle by and it also had the highest percentage of mortgages in outstanding outstanding in mortgages of percentage highest the had also it and lvk eulc Ceh Pln ad Romania and Poland Czech, Republic, Slovak entral European countries in the respect that that respect the in countries European entral d aiu loan maximum nd e 2

7% in mid 1990s to 13% 1990sto 7% inmid in2007.

ue opein sae ad h sae f ao fre in force labor of share the and soared completions ouse ) and considerablyand steeperGDPcrisis. downturn during the driven by demand but also by the Irish banks who Irishbanks by also the but demand by driven 35

who writes that between 2003 between that writes who Ireland rose by 50%. by rose Ireland 10 mortgages - to

- au ratios value

in credit in 2008 was only 1 only was 2008 in credit in I adto, h state the addition, In . 40 ng 36

Between 1994 and 2006 the 2006 and 1994 Between no mortgages. into - 2008 the average annual average the 2008 they ost of it of ost

h cei t GDP to credit the had considerably had

The Baltic Baltic The was in the the in was

continued continued 2%. u the cut

The The CEU eTD Collection 46 45 44 43 42 41 doubled bubble amou high the due largely was crisis banking T re and banks the save to trying of cost larges the of liabilities domestic the only guaranteed Iceland 870% was ratio the 2007 GDP,in Lands (Glitnir, 2006. in 320% to creditrapid most the Icelandexperienced Source: World Bank Figure 2

he Thorhallson & Kirby 2012, 805. &2012, Kirby Thorhallson Nielsson 245. Rogoff &Reinhart 2009, & Nielsson Torfason 28. 2012, stock. own financingbankstheir i.e. & Nielsson Torfason 7. 2012, government debtgovernment 44 . from 2007 2000to :

& & Torfason 7. 2012, Real housing prices rose by around 65% between 2002 between 65% around by rose prices housing Real Credit banki and Kaupthing). While in 2000 the total assets amounted to 109% on 109% to amounted assets total the 2000 in While Kaupthing). and banki - to

Huge increase can be seen also in total assets of the th the of assets total in also seen be can increase Huge -

GDP ratio. so a

re

d .

46

from 28% in 2007 to 96% of GDPof 2010. 96% in to 2007 in 28% from

41 .

The three largest banks collapsed in October 2008 and 2008 October in collapsed banks largest three The - establish them equaled to about 22.5% of the GDP the of 22.5% about to equaled them establish - to - GDPgrowthincreasing ratio 11 nt of “false equity” “false of nt

t banks t 43 - , they also had a housing a had also they , 2006.

Nevertheless, the total the Nevertheless,

45 While the Icelandicthe While 2003 in 130% from

Household credit Household re ags banks largest e . 42

CEU eTD Collection 52 51 50 49 48 47 GDP underwentcurrency,also its it devalued Iceland Although Irelandadjustment in between 2009 adj future near the in deficit billion trouble. into got banks Irish sector estate real the 2009 in 15% another reven and of dependency 2008 in 12% decreased revenues tax Ireland In to state from dividends out autumn in taken were actions Further 20%. to 18% from increased was insuran unemployment 8%, further by expenditure wer government the of expenses 2010 in and GDP of 9% t introduced not impleme Estonia whether over views different are there Although

Ibid. Darvas 2011,11. Dellepian 12; Lane2010, 8. Raudla2013, &Kattel See 2011;Aslund & Kattel Raulda2013. fulfill ustment in Ireland between 2008 between Ireland in ustment 47

there is agreement that Estonia used fiscal retrenchment fiscal used Estonia that agreement is there in 2009 in

- uo bailout euro

the Maastricht criteria and their keep budgetunder 3%. deficit e and Hardiman 2012. Hardiman and e hree austerity hree , 6.4% in 2010 and 2.5% in 2011. in 2.5% and 2010 in 6.4% ,

Hardiman 2012, Hardiman2012,

u el with deal e

s

- on transac on

owned enterprises. owned . packages in packages

hs en ta Iead a t ipeet austerity. implement to had Ireland that meant This .% f GDP. of 2.9%

96

.

the e cut by 7% by cut e

tions in the real estate market. estate real the in tions -

IMF - 2011 2014

2009. In2009 2009. - U hc required which EU total

amount 48

.

Thanks to fiscal retrenchment Estonia retrenchment fiscal to Thanks 12 The seco The n h frt utrt pcae h ope the package austerity first the In ed

52

to to

s In The currency depreciated depreciated currency The ce benefits were curtailed were benefits ce

11.3% ofGDP. to 19% to

November fiscal consolidation measures equaled to equaled measures consolidation fiscal nd austerity package cut governmental cut package austerity nd

fiscal fiscal of GDP of

ht rln achieves Ireland that ( Table2

2010 Ireland agreed to a to agreed Ireland 2010 adjustment 49

nted austerity measures or or measures austerity nted 51 Because of the collapse of collapse the of Because

(in 2010 (in

in Appendix 2009, namely taking namely 2009,

equaling

by roughly by and prices the T u to due he overall overall he

). ) managed managed budget a .

50 VAT 5.1% rational Estonia

F

48% iscal n

tax the the

85 85 of of

CEU eTD Collection 57 56 55 54 53 investigation. corruption start to and legislation amend to power much have not do parties pa strong exercises also government the Ireland In dominance. Hardiman to According issue ofconfidence meant couldbe which that it adopt polity to opposed as public, existence the into translate partnership social of sense of lack the and organizations non a also is Estonia E countries thathave are polities Compound institutions. found are polities Simple power. exercise who discourse Coordinative polities simple in place usuallytakes discourse move to informa of exchange fruitful a by coordinative a between Schmidt betweenand 2009 2007

stonia Thorhallsson & Thorhallsson 805. &2012: Kirby Thorhallsson Hardiman 2010a, 56; 2012, 9. 56; 2012, Hardiman2010a, 2007. & Greskovits Bohle 305. 2008, Schmidt

becam

54 is a simple polity because because polity simple a is

to

distingui down p ee simpler even e Kattel 2012. Kattel

prop shes between shes rm h mr pwru gr powerful more the from

- through consensus a building . and com and ortional representativeortional systems. in usually occurs corporatist state because because state corporatist 53

57

of communicative discourse with discourse communicative of Te dpin f h frt austerity first the of adoption The . rln ad rti ae h etee xmls f executive of examples extreme the are Britain and Ireland

municative discourse is that while the while that is discourse municative tion between multiple parties, i parties, multiple between tion communicative generally oe i cnetae i te ad o te executive. the of hands the in concentrated is power compound polities polities compound

13 found in found which are characterized by a strong executive. stronga characterizedby are which

us o h ls powerful less the to oups

typically and coordinative discourse. discourse. coordinative and of weak labor unions and civil society society civil and unions labor weak of

ed lengthy without discussions. federalist states, states, federalist dialogue.

56

in unitary states with majoritarian with states unitary in .

The strong difference strong The where the aim of of aim the rty discipline. The opposition The discipline. rty n

uig h cii Estonia crisis the During package was linked to the the to linked was package the latter the

there

former is characterized is former corporatist states or in in or states corporatist simply are multiple par multiple are

informatio Communicative . The difference The

inform s in s

n

ing power power

tends tends

ties the the 55 ‟s

CEU eTD Collection 60 59 58 the when because discourse communicative the feeds also corporatism” “sectorial Iceland‟s bridge of instead votes win to trying politicians as Iceland down. broke in signed was pact” “stability A dominant. become has discourse then since but 2003 to 1980s Kattel & Thorhallsson to According interestsit unilaterally. pursue to decided government the because partly failed pact social new a sign to negotiations moved recen the in but discourse coordinative more a have to used Ireland that imply factors These life”. public Irish in issues problematic most the are institutions government links negotiations. agreement government, from moved has Ireland years polity. simple a is it that implies state unitary a is Ireland life.” political Irish of part significant of prevalence a itself is debate policy a in engagement issues. complex on them OECD the among Minister countries. Finance autonomous most the having as out stands Ireland

Regan 2011:Regan 487. 88. Hardiman2012, 56. Hardiman2010a,

to the business and construction and business the to

no cmuiaie discourse. communicative a into The parliamentary committees do not haves not do committees parliamentaryThe from

59 h la the is power executive The electorally dominant Fianna Fail Party had strong financial and personal and financial strong had Party Fail Fianna dominant electorally The

1987

b r nos n te mlyr wr wrig ne a under working were employers the and unions or has bec has to 2009 to 60

Hardiman ome more and more characterized by simple polity features such such features polity simple by characterized more and more ome

they have become a more simple polity where communicative where polity simple more a become have they but indi in the 2000s the in oriaie icus t cmuiae discourse communicate to discourse coordinative 58

cates concludes that that “ that that concludes Iceland used to have a coordinative discourse from from discourse coordinative a have to used Iceland sectors

hs s xmlfe b te at ht n 09 the 2009 in that fact the by exemplified is This

that Ireland is a simple polity. simple a is Ireland that 14 .

the government has started to dominate these dominate to started has government the According to Hardiman (2012: 5) “impartial “impartial 5) (2012: Hardiman to According

- build pecialized expertise available to advise advise availableto expertise pecialized ing between different interests. Also, different between ing disabling of active parliamentary active of disabling There is evidence that in recent recent in that evidence is There 2009 but later broke down down broke later but 2009

Also, the fact that that fact the Also, social partnership partnership social t decade it it decade t .

The The The CEU eTD Collection 63 62 61 Rational Historical Factor actors)internationalinstitutional and (theeconomicfactors. role of groups. interest important dec and partnership social of ideology corporatism. therefore and communication to related role the Itconsiders practices. social and norms S programs. political and rules current and previous and policies accoun into taken are elites) government, opposition, unions, labor (e.g. actors and groups interest ideology, of diff role Thechange. policy explain to groups of interests the on focuses RI as rational historical, sociological, anddiscursive. institutionalism institutionalism Schmidt intere

Thorhallsson & Kattel 2012, 16. 2012, & Kattel Thorhallsson Haggard & Kaufman 1992, 1992, & Haggard Kaufman Avdagic2010. 2010. 2008, Schmidt sts of sts . I oue o the on focuses HI t.

3. 62

oe u wt te da that idea the with up comes the privilegedare they ignored, tend Study factors (DI). (SI) and and (SI)

I use these four “new institutionalisms” to categorize potential factors potential categorize to institutionalisms” “new four these use I

Existing literature also suggests the following important factors important following the suggests also literature Existing ainl institutionalism rational

path dependency of institutions. It takes into account previous previous account into takes It institutions. of dependency path

isions are made based on a consensus with all all with consensus a on based made are isions itrcl institutionalism historical 15

ideology. Different in previou Characteristics

of to publicly prosecuteto

public opinion and national symbols.national and opinion public

A country is co Ais country R) is (RI) s policies, rules

terest groupsterest

complemented

I puts emphasis on cultural on emphasis puts I 63

rporatist when there is a is there when rporatist the government.the

, opposition, opposition, ,

(HI),

by sociological discursive discursive 61

erent DI is is –

CEU eTD Collection 65 64 strongCEE outlier among the a as emerges Estonia 2009, or 2008 in growth GDP negative not did Poland that account center the were exceptions only The Eur Eastern and Central 10 of out 8 2012, April ByHungary. Slovenia, Lithuania, Bulgaria, Romania, in example for changed economies. market dependent I out. broke crisis governments countries postsocialist the national among in changes of trend common the in exception an been has Estonia protests. many with met been not have and successful been have government the by implemented Communism the during under times difficult the to years difficult M Prime The crisis. Estonia In Economic International Discursive Sociological

Aslund Aslund Orenstein 2010. Orenstein 2012a,

However,

references have been made to the communist regime during t during regime communist the to made been have references

12

.

n Hungary and Poland the Poland and Hungary n t he inister and the Estonian President have compared compared have President Estonian the and inister

otoils factor postsocialist

was even worse and that is the reason why the austerity measures measures austerity the why reason the is that and worse even was

countries. 64

. In Lat In . mn te otoils cutis h gvrmn has government the countries postsocialist the Among pa (E) onre hd hne ter government. their changed had countries (CEE) opean - right governments in Estonia and Poland. Taking into into Taking Poland. and Estonia in governments right

via the government has changed two changed has government the via

re is a discussion about the model of capitalism in capitalism of model the about discussion a is re

os o s not does h Sve occu Soviet the 16 Length crisis,severity of IMF, EU corporatism gov‟t, opinion public

strike rate, turnout. voter e t pa sc a important an such play to eem

ain aig ht h situa the that saying pation clua symbols, cultural , , n , he latest economic latest he aturecrisis ofthe h contemporary the

times since the since times

rs in trust

role. role. tion 65

CEU eTD Collection 67 66 its has crisis the during Estonia in discussions dominated that discourse neoliberal The Discourse the 1990s in w analyze influence ofinternat Ithe Then etc). parties, different representatives, employers‟ unions, (trade actors domestic other of views describethe I will Next 2009. in packages austerityintroducingthree After 2009. during measures austerity justify to elites political the by used were arguments which show findings Kattel‟s & Raudla on based Then, 1991. in independence regaining after subchapter In this Introduction went throughdifferent a change but areactors divided onaofissues. domesticnumber still the as viewed essentially are crisis the t economiccrisis the causesof that n Irelandof numberEstoniashareanda While Chapter 2: ext I will demonstrate how how demonstrate will I ext

Raudla &2011.Kattel Raudla 2013. &in Democracy Debt course in the finalmyessay inwere used also subchapter this Smallin parts lessons of the disaster.the of lessons Irish 1.

elites a elites Estonia

that I will show what Prime Minister Andrus Ansip said in his speeches while speeches his in said Ansip Andrus Minister Prime what show will I that

Narratives re 66

talking about the failure of the Irish the of failure the about talking

Ifir will

In the Icelandic case I will describe how the government discourse discourse government the how describe will I case Icelandic the In

of st demonstrate how the neoliberal discourse in Estonia developed Estonia in neoliberaldiscourse the demonstratehow st they differ they

o be mainlybe domestic o

the crisis ional actors during the crisis. ional actors the during

external/

on the dependent variable. The primary difference is difference primary The variable. dependent the on

interna

si 17 milarities(are

tional. Subsequently there is there Subsequently tional. . In Estonia, on the Inon Estonia, .

development model and consider and model development

same on same

independent variables), variables), independent contrary, of causes the no

talk about about talk 67 l also ill

will I

the the

CEU eTD Collection 73 72 71 70 69 68 in time that at debates political in important became discipline fiscal to commitment The confidence inthe kroon, arguments: policy three contained that Estonia Accordi common. in lot a fact in have views two the that reveals look closer Aelites. the by used were which narratives the identifying on but factors, important most the determining on not is (2012) being difference the this, on disagree to seem (2012) Greskovits & Bohle and (2012) Kattel & factors. nationalistic Hope Although communities additio in that argue (2006) Feldmann and they when gen In regime. rate was tax flat a introduced advice IMF‟s ignored they time second The prepared. more technically Eston suggested initially it because IMF the Greskovits & Bohle to materialized. According influence international before 1992, in made were decisions important most the that assert They actors. external were period this during made decisions that argue they Greskovits & Bohle Although domestic. and international were 1990s the in Estonia in discourse this influenced which reasons the independe its regained Estonia when 1990s, early the in origins

Haas 1 Haas 2007. & Greskovits Bohle Ibid. Ibid. 97 2012, & Greskovits Bohle 406. 2012, Kattel and Hope

992. ng to Hope & Kattel (2012: 406), in the early 1990s a policy discourse emerged in emerged discourse policy a 1990s early the in 406), (2012: Kattel & Hope to ng

73

n dmsi eooi fcos a iprat oe a as pae by played also was role important an factors, economic domestic and

(2)

- 113.

pleasing the IMF,pleasing the

explained by the fact that the focus of Hope & Kattel Kattel & Hope of focus the that fact the by explained eral, Bohle & Greskovits & Bohle eral, 69

o o ecue h rl o itrainl factors, international of role the exclude not do 18 t te nlec o itrainl epistemic international of influence the to n (3) (1)

a otoe oeay eom ni i was it until reform monetary postpone ia

and fiscal independence.

the importance of fiscal discipline to inject to discipline fiscal of importance the

largely made independently of of independently made largely nce. H nce. 71

and Bohle & Greskovits& Bohle and 70 ope and Kattel and ope , Estonia even defied even Estonia ,

68

think 72

CEU eTD Collection 76 75 74 to became regime, tax income flat the and board currency the with together budget, balanced pre the of Because high value symbolic onindependence. nation of process the by influenced considerably were Estonia arguthe shared population the and independence an budget balanced independent a an having having because of country importance the with merged also discourse policy fiscal The ontheoverheatedopinion Estonian economy. narr public in made also were IMF the of support favorable the to References IMF. the to references used have not could elites the discourse public in that mean not does this but regime board ha might factors domestic and IMF the defied have might Estonia occasions. two on IMF the defied actually Estonia that Greskovits & Bohle by held view the contradict not does finding This confidence. investor the influence opinions IMF‟s the that debates in mentioned often was it because important became IMF the Pleasing discourse. policy the of part integral an became discipline fiscal kroon, the of reliability the maintain to order In st as well asconfidence inject to thought was currencyboard the 1990s, early the in hyperinflation to Due board. currency the of introduction the of because Estonia

Bohle & Greskovits 2012, 97 2012, & Greskovits Bohle 406. & Raudla2012, Hope 97 2012, & Greskovits Bohle ment made by Gresko by made ment atives during the latest financial crisis in Estonia without bringing up the IMF‟s the up bringing without Estonia in crisis financial latest the during atives 75 . Conservative fiscal policy was associated with values that the political elites political the that values with associated was policy fiscal Conservative . - crisis success of Estonia‟s economy during th Estonia‟sduringof economysuccess crisis

- - 113. 113. -

stability, prosperity and independence. This view is in line with line in is view This independence. and prosperity stability,

ve played a bigger role in the decision of choosing the currency currency the choosing of decision the in role bigger a playedve vits & Bohle & vits

76

that the economic decisions made at that time in time that at made decisions economic the that

19 country‟s credit rating, which affects foreign affects which rating, credit country‟s

d low public debt was seen as a sign of of sign a as seen was debt public low d - state building, which placed which building, state e 1990s and in the 2000s the 2000s the in and 1990s e ability into the kroon. the into ability 74

CEU eTD Collection 79 78 77 Minister Finance Interim revenues. than expenditures more have to sense make not does it where family a of budget the like country‟sis a budget that said was It made. were budget” a sense” “common to references reasoning of line first the In long term, rather thanmyopic. that said was it Finally, was it 2009 worsenedduring argued was it Initially inter time same the at and implement were packages Kattel austerity & Raudla to According three when 2009 in place the took in found that be discussions can 1990s the in started which discourse neoliberal same the of Traces Domestic the with comply to Maastricht criteria deficits. onfiscal need the by reinforced was budget balanced a of rule unwritten the words, other economy.In the into confidence more even injecting of way a as elites political euro the join to desire the by reinforced further was aforem the of because choice policy dependent Estonia. hit Crisis Financial Global the when t Raudla, & Hope to According be seen three“holy as the

Raudla &2011,Kattel Raudla174. Ibid. 406. & Raudla2012, Hope

nar ratives the crisisthe during elites by

(1) (3)

pillars” of Estonia‟spillars” of economy. - related

the country needs to implement policies which are useful in the in useful are which policies implement to needs country the simply that the country did not have money. When the crisis crisis the When money. have not did country the that simply

arguedthat

79 he same same he

the political d political the –

arguments were presented to defend austerity measures. measures. austerity defend to presented were arguments neoliberal neoliberal (2)

fiscal retrenchment was the solution to the crisis.the to solution the wasretrenchment fiscal 20 iscourse at the time shows that three distinct distinct three that shows time the at iscourse 78

entioned three “holy pillars.” “holy three entioned

dpig utrt maue ws path a was measures austerity Adopting discourse

77 - oe whi zone

played a role in in role a played nd metaphors about the “family the about metaphors nd ch was promoted by the the by promoted was ch policy reactions reactions policy This sentiment This ed. - -

CEU eTD Collection 83 82 81 80 Estonia then budget, the cut not does Estonia “If that said Laar Mart Minister Prime former the example, For decisions. independent take to ability the lose would it then internally crisis w successfullydeal not did Estonia if arguedthat also was it logic of line second the In May 1%more been 2008therehad non 10%. people by negatively inclined outnumbered euro adopting the after for country their won also populace idea the among support The crisis. the during government the of goals important most the of one which criteria stip Maastricht the fulfill to needed Estonia entry for qualify to order In zone. euro the joining of objective the was argument previous the to economy.connected Strongly 2009 investments. further attract and region CEE the of rest the from apart itself set could Estonia austerity, fiscal implementing by that said for attract andagencies ratingsand investors international reassure would This economy. the in confidence restore and currency the of value the maintain would discipline fiscal that argued was it reasoning of line second the In international from borrowing markets was dueexpensive too tothe lac and bank, central the from borrow not could government the system board currency the to Due difficult. and expensive was borrowing that argued Helir

Eurobarometer Flash December 2010 N307, 39. N307, 2010 December Flash Eurobarometer Ligi 2009b. Ligi 2009a. 2009. Seeder ulated that the budget deficit could not exceed 3% of GDP.of 3% exceed not coulddeficit eurobudget the the that ulatedJoining 82 - Valor Seeder argued that “if we do not do we “if that argued Seeder Valor

aig ht t that saying

e a rtns f E cutis kl ivsmns it te Estonian the into investments” “kill countries CEE of ratings bad he

–

in May 2009 May in - supporters thansupporters. supporters k of investor confidence. investor k of

81 eign investments. Finance Minister Jürgen it LigiFinanceMinister investments. eign the people who expected positive conseq positive expected who people the 21

He repeated this in the Parliament in October in Parliament the in this repeated He have money, we cannot spend” cannot we money, have

80 - zone became became zone tws also was It . uences ith the the ith 83

In - CEU eTD Collection 89 88 87 86 85 84 the crisis. rating international investments. foreign attracting economy reiterated year When Reports Governor bythe Central Bank competitivenessalso damag oftheeconomy do and would to Estonia forcing interest, with future the in back paid be to have would it then loan, a take would Estonia if that said short being of instead th tackle to order in that argued was it Finally, IMFthat the support Esto EU and the said often was It measures. austerity implementing for Estonia praised who actors external as taxes increase and expenditures cut to have follow.would chaos total a and governingEstonia the ofover take would would we Afterthat “ that said Union Publica IMF” the to serf a become would

Anvelt 2009. Anvelt Lipstok2010. Lipstok2009a. &176. Kattel Raudla Hankewitz 2009. Ligi 2009a, Laar2009. s

2008 Governor of the Central Bank Andres Lipstok Andres Bank Central the of Governor

the importance of conservative of importance the

and 2009 and

s

agencies and IMF officials who have approved Estonian policies during policies Estonian approved have who officials IMF and agencies

in the Parliament the in - sighted. For example, the Minister for Economic Affairs Juhan Parts Parts Juhan Affairs Economic for Minister the example, For sighted.

f soi wud o mng t ct blin ros te IMF then kroons, billion 8 cut to manage not would Estonia If

increase taxes. But raising taxes would have a bad effect on the on effect bad a have would taxes raising But taxes. increase

84 . Another leading politicia leading Another . nia for implementing austerity. , blame was put on the global financial si financial global the on put was blame

fi scal policy which is the cornerstone of a stable stable a of cornerstone the is which policy scal h spee The 22

well”

cii a long a crisis e 85

ch ended ended ch the introduced . In addition, references were made to made were references addition, In . e its reputation with investors. e reputation its n from the Pro Patria an Patria Pro the from n - term view should be taken, taken, be should view term by 86

final report final making references to to references making s tuation. H tuation. 88

89

of the of d Res d 87

e CEU eTD Collection 91 90 countries. other of number a than situation better congrat byAnsip startedspeechcountry his reiterating facing thatthewas package No continent, region andcountry”. “every touched have which ruptures” “global the were speech his in causes main The crisis. the of causes many the of one as it treating impact, its downplayed but bubble estate real Mini Prime the decisively.short, Inand quickly act to was thing important most The opposition. the devalued or government or the at markets fingers point export to easier the even and bubble, currencies estate real the banks, Swedish the US, the on s financial the of collapse the blame to easy be would it that said also He Estonia. hit also have ruptures” “global the that and crisis the against defenseless practicallyare countries untouch left been has region nor country continent, no that and Depression Great the since recession greatest the in Minister. Prime speech the the givenby started Hewas Parliamen Estonian the before example, For causesinevitable.external were and discussion. the February18 On Austerity packages

Ansip 2009b. Ansip 2009a. Ansip government framed it in terms of confidence, allowing it to be passed without extensive without passed be to it allowing confidence, of terms in it framed government reference to the the to reference ltdEtnas because Estonians ulated was introduced in the Parliament by the Prime Minister Minister Ansip Prime the by Parliament the in introduced was n fiil pehs h Etna Pie iitr convey Minister Prime Estonian the speeches official In

th

2009, when the first austerity package was put to the vote in the Parliament, Parliament, the in vote the to put was package austerity first the when 2009,

do ed by the current crisis. In the second paragraph he said that small small that said he paragraph second the In crisis. current the by ed mestic

causes of the crisis crisis the of causes

due to due

conservative fiscal policies fiscal conservative t voted on the on voted t 23

e ttd ht osraie icl policy fiscal conservative that stated He was 90

by saying that the world economy iseconomy world the that saying by made when the the when made first austerity package austerity first

a global financiala crisis is the country was country the is ed on

ster mentioned the the mentioned ster h ve ta the that view the second austerity austerity second May 21th

a speech a 2009 ystem

. in a a in

He 91 . CEU eTD Collection 93 92 cope must In for need the highlighted markets, conservativefiscal and financialregulation. policies bond European the in especially markets, financial do bred was crisis the that possibility the to made was reference No crisis”. financial global conference euro, onthe not did discourse The quickly thecrisis. from more recover Estonians help would his policy fiscal in conservative alsothat saying speech by way the habitual ended He crisis. financial global the to reference a making way: star Ansip cuts. expenditure the of description detailed a was speech the of Most avoided. was crisis the of causes numerous the to reference explicit any 30 September On economy because they lower meant mor the for good were ratings credit better that argued simplyInstead, Ansip domestic. been have could crisis the of causes the that possibility the or bubble, credit the to or bubble property they if get conclusion, economy. would In the in confidence investor Estonians maintained that bonus a was euro the of adoption the that said also He enterprises. for and mortgages for rate interest lower a meant ratings credit Bettereconomy. t of credibility the increased which ratings credit international higher meant Ansip 2010. Ansip2010. Ansip 2009c. Ansip mestically. In the context of the European economy he said that the recent storms in global in storms recent the that said he economy European the of mestically. context the In April 2011, after be after 2011, April

with a with

global financial crisis. In the same paragraph he also said that said also he paragraph same the In crisis. financial global th we the when , ing

93 hne n h floig er 2010 years following the in change

Ansip praised Estonia‟s “thefiscal and conservative blamed policies

victorious

hr aseiy package austerity third in the in tgage rates. tgage elections, A elections, 24

nsip again mentioned that Estonians Estonians that mentioned again nsip

a itoue i te Riigikogu, the in introduced was - 13. e h pehi hs habitual his in speech the ted n o reference o n 00 a a international an at 2010, In was made to the to made was e country‟s he international international 92

CEU eTD Collection 97 96 95 94 p social the breaching was government the fact the against protest a was strike the that stated briefly only 2009 3rd June on organized was that strike release press Aargued. poorly were (CTU) Unions Trade of Confederation release press The weakness. their of because Estonia in discourse policy Raudla and Hope to According the dominance discourse. ofthe neoliberal measures austerity the of content the about costs. social Raudla its and Hope about to According concerns raised and cuts the of critical were Union People‟s and joi to order in retrenchment fiscal supported Union Publica Res and Patria Pro and Party Reform The package. second the of introduction the before government the left but measures austerity of package first the with ahead went Democrats progr fiscal alternative real a with up come not did they instead, increases tax proposing measures, austerity the of content the about disagreed opposition the while Acc well. as necessary is actors political other of Analysis Other domestic actors overheated 23 February credibility. increase which debt of levels low and policies a world the over all experts economic

ETUC 2009a. ETUC 412. Ibid, 411. & Raudla2012, Hope 2011, Kattel Raudlaand 176.

economy or toothereconomy domestic factors. or th

te ainl needne a o Estonia. of day independence national the ,

95 96

the fact that disagreements in the coalitions arose mainly arose coalitions the in disagreements that fact the rd uin ad h cvl oit dd o ji te fiscal the join not did society civil the and unions trade gree that the way out way the that gree

rather than questioning austerity in general, show show general, in austerity questioning than rather 25

artnership contract signed between signed contract artnership

n the euro the n The same ideas were repeated were ideas same The hr were There

rig o ada n Kattel and Raudla to ording is to follow conservative fisca conservative follow to is - zone. The Centre Party Centre The zone.

o reference no am. The left Social left The am. s of the Estonian Estonian the of s 97

regarding the regarding s

o the to

on 94 l , CEU eTD Collection 101 100 the by 99 blinded not 98 was Vitsur Heido Economist opportunities. given the maximize and area economic Among European the of criteria. part a already Maastricht was Estonia that argued the Arrak Andres economists, meet to Estonians motivate would which goal” “holy a La in situation the to partlythanks moment, the atway suspicious very in us at look investors “Foreign saidKäo economy the in trustworthiness raise would euro the adopting that and cost any at wasted businessme were favor in Especially zone. Estonia in newspaper biggest the by interviewed were economists and businessmen Famous tax. income personal pension for exception the dropping expenditures, negative. be would consequences area euro it for qualifying successfully not of repercussion grave the of government the warned and euro Employers‟ Estonian the the ofcrisis adoption Duringthe the supported (EEC) Confederation not affect the dominan did and argued poorly also were these but crisis, financial the with dealt which releases press two only were there 2009 During release. press the in or speech the in made were arguments C the with negotiate to commitments its breaching was government the that said mainly Tali,Harri was CTU it the of President given speech a In 2008. in government the and representatives employers‟ the unions, trade the

99 Kaldoja 2009. Kaldoja 2009b. ETUC

Niitra & Meister 2009. & Niitra Meister 39. N310, Flash Eurobarometer . In October 2010 a 2010 October In .

that adopting the euro would be the most logical step because it would allow it to it allow would it because step logical most the be would euro the adopting that would

be positive in the medium to long term. term. long to medium the in positive be tvia”. A consultant on economic affairs Raivo Vare said that Estonia needs Estonia Varethat Raivo affairs said economic on tvia”. Aconsultant

- t discourse.

Postimees Postimees majority (55%) of businesses believ businesses of (55%) majority

100 –

nAgs 20 o ter huhs n onn te euro the joining on thoughts their on 2009 August in Business representatives supported cutting more public more cutting supported representatives Business TU in implementing new labor laws. No economic No laws. labor new implementing in TU n. Jüri Käo said that the opportunity should not be be not should opportunity the that said Käo Jüri n. 26

ers regarding income tax and raising the the raising and tax income regarding ers e d Only 14.2% believed that the the that believed 14.2% Only

that the effects of joining the joining of effects the that 101 98 - .

CEU eTD Collection 105 104 103 ofthe Bankof Board Supervisory ofthe Chairman thewas Neivelt 102 low and competitiveness of lack its was economy Estonia‟s with problem main the but how on Paper for.strive should Estonia On 27 April agreed Vitsur Heido Fund focus magazines and journals of lack the was possible made was bubble economic the how reasons the of one him to Estonia. According in economics on journal a publishing start to proposed he future the in explain and analyze to failed had they that saying Bank, Central the and government the at fingers pointed He Estonia. in wrong went exactly what of analysis independent no been had there that concerns expressed and th is competitiveness raise to productivity way the because Estonia, save would which remedies magic the not were investments foreign attracting and euro the adopting that article an published Neivelt Indrek 2009, October On sector. export the in productivity low was economy the euro the joining consider not should Estonia 14 the on that, before days few A Alternative domestic opinions adoption was aninterestingandworth was onethoroughanalysis. euro of idea the that expressed he Nevertheless, economy. the strange would austerity of euro the joining of opportunity Ratt2009. Vitsur2009. Neivelt2009. Former head of the Estonian largest bank Hansapank, which was taken over by Swedbank in 2004. In 2009 2009 In 2004. in Swedbank by over taken was which Hansapank, bank largest Estonian the of head Former

. He also mentioned that Estonia had o had Estonia that mentioned also He .

to tackle the crisis in Estonia. It concluded that euro adoption was necessary necessary was adoption euro that concluded It Estonia. in crisis the tackle to 104 ing on economics. An economist working for the Estonian Development Estonian the for working economics.economist An on ing

in the second largest newspaper in Est in newspaper largest second the in

105

ht onn te euro the joining that -

zone. He thought that there was a danger that a large amount large a that danger a was there that thought He zone. th

th of August, Indrek Neivelt Indrek August, of

what went wrong. In order to avoid economic bubbles economic avoid to order In wrong. went what The EstonianDevelopmentThe a presented White Agency - 27 zone so soon because the main problem facing problem main the because soon so zone

ne of the largest GDP falls in the world world the in falls GDP largest the of ne - oe a nt h ms iprat goal important most the not was zone

St Petersburg. onia 102

expres

–

Eesti Päevaleht arguing Päevaleht Eesti sed rough increasing increasing rough 103

the idea that idea the

CEU eTD Collection 109 108 107 106 and about think this”? T km finish the at stop to reasonable not was it that said raising wasis problem IndustryT and Commerce of Chamber important Estonian most the of head The problem. the that solve not would that euro the that and competitiveness idea earlier his repeated Neivelt Neivover Minister Financethe supported trustworthy. more currencyis international an Economist because kroon Andres he said Arrak the keeping than reasonable more was euro the to changeover Ligi, Jürgen Minister Finance participan of majority Financial Affairs.The and Economic debate a was there 2011 November In Debate November in blindly. BankEstonia. of Central A the in responsibility the bear to has somebody that was lessons the of One crisis. the from learn should Estonia that lessons 6 listed He Brussels. from originated introduced everyonesee Estonia in but introduced being were laws new and crisis the of causes the about talking were many countries other in that wrote He 2010). (Neivelt crisis financial the from learned lessons the on discussion m business the in concern his repeated Neivelt 2010 In productivity sector inthe export

EBA2009. EPL2009. Neivelt2010. 2009. Fund Development Estonian . Luman .

109

was caught saying “What does this sentence mean mean sentence this does “What sayingcaught was ccording Bank Swedish theCentral banks Estonia trustedthe toNeivelt, of

2009 o hell withthinking! Get towork!” back

106 .

med happy with the current situation and the only laws onlylaws the and current situation the with happy med oomas Luman, who represented the employers‟ views, the represented who Luman, oomas 108

elt because Ligi had a long Ligia had because elt about whether to adopt the euro at the Ministry of Ministry the at euro the adopt to whether about 28

- line when you have ran alre ran have you when line agazine Director agazine ts favored adoption. According to adoption. According favored ts

–

“Let‟s take some time off“Let‟s time some take - term perspective. Indrek perspective. term 107

that there was no was there that ady over 40 40 over ady CEU eTD Collection 113 112 111 110 mentioned, neither didtheEU support devaluation. government Estonian the with consultations IV Article concluded IMF the euro the joining for Support priority”. highest their showe also 15 explicitly December on was stated peg currency the for and board currency the for Support 2008. December suppo not did IMF The crisis? the during Estonia in role a played actors international other of kind What would producea effect. domino effects” hav would move this that thought they that was this for reasons the of one Rosenberg, Christopher countries Baltic the and Europe Central to representative regional IMF‟s the to According it. support to started they 2008 December in ended t Union and government Latvian the with talks bailout after but peg rate exchange Estonia in than Latvia in role bigger much a played actors re and 2010) 2009, (Economist austerity implementing for Estonia praised who actors policy international by reinforced also was economy the of pillars” “holy three the valued that discourse The International actors

IMF 2009 IMF 2008 IMF 6 Kuokstis2010, Rosenberg2009 110 Scn, t a te U hc dd o spot eauto bcue t huh it thought it because devaluation support not did which EU the was it Second, . . . d support for euro adoption which the Estonian authorities “rightly consider to be be to consider “rightly authorities Estonian the which adoption euro for support d

http://www.imf.org/external/np/sec/pn/2009/pn0933.htm http://www.imf.org/external/np/sec/pr/2008/pr08322.htm ceiving an invitation to join the euro the jointo invitation anceiving t eauto atr h biot rga wt Lti ws ged pn in upon agreed was Latvia with program bailout the after devaluation rt .

.

th

2008 in an official IMF statement IMF official an in 2008

111

29

- zone in 2011.in zone internationalDuringthecrisis

- zone was repeated in March 2009 when when 2009 March in repeated was zone

.

112 Initially they were critical of the of critical were they Initially

about Estonia. The statement The Estonia. about e “severe regional contagion contagion regional “severe e 113 . As . e European he previ ously CEU eTD Collection 116 115 114 th arguing measures, austerity supported he which in Postimees 12 June On strong. Ilves‟s too whether was discussed reaction people of group another and measures austerity the justify to group One crisis. financial the from learned be could that lessons the on use to concentrated them of none but journalists and academics politicians, by responses many were that and 1930s the in live Key still Keynesians that stated simply Laar analysis. economic any lacked article The Keynesianism. of supporters and austerity of supporters later days Estonia. A of in couple as well as internationally attention gained messages of exchange This "wasteland". thing”. be Columbia Must avs Princeton a country my declare & matters fiscal on pontificate can you means trade in Nobel a “Guess agreed& reele to they've what do actually & respond won't bad, is English their Europeans: East on sh*t “Let's afterall, they're just patronizin & overbearing smug, be & about nothing know we something about write “Let's crisis levels message short 6 June on started debate The Ilves. Toomas Hendrik Estonia Preside the and Krugman Paul economist US between debate famous internationally the after evenemerged crisis financial Estonian the from lessons the about discussion real No Krugman vsIlves debate

Aslund 2012 Aslund Laar2012. 2012 Krugman nesianism in 2000s is akin to putting a vampire in chargehospital aputtingin vampire a to ofakin is 2000s in nesianism

Mart Laar wrote an article in Postimees explaining that the debate was between was debate the that explaining Postimees in article an wrote Laar Mart

. Ilves. on replied Twitter wit b . 114

.

http://krugman.blogs.nytimes.com/2012/06/06/estoni

ct thatare govts respons n i bo soig ht soi‟ GDP Estonia‟s that showing blog his on wogs

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th h several tweets. example: For

ible.” n ril b Ade Aln ws published was Aslund Andres by article an 30

an ees tl had still levels th -

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of Estonians started Estonians of 115

. InthereEstonia . o rahd pre reached not 116 t of nt

g: g: in - CEU eTD Collection 117 di economiccrisis accepted President The country. the of governance ord every that so up set was platform virtual a also but Estonia of elites intellectual the of gathering a was Assembly became donated had he that 2012 March primarily of attention the grab not Itdid a made and variables” growthreference inthereal tothe unsustainable rate estate sector. economic the of most in volatility of degree high unusually “an presentation a gave he 2012 Governor Bank Central the as over took Hansson bubble noteworthy time first The Central new The Bank Governor up tothe crisis. aus count European Southern that argued and currency its devalue to not choice Estonia‟s defended Aslund article same the In measures. austerity not and freeze credit international the was Baltics the in crisis the of cause the that

Hansson 2012. Hansson terity measures terity by the political elites or public officialspublic or elites political the by

so huge that eventually a People‟sAssembly a eventually that huge so o h Primn s ta te alaet ol sg te into them sign could Parliament the that so Parliament the to about corruption since March 2012. The discussion was triggered by a scandal a by triggered was discussion The 2012. March since corruption about when a member of the governing party governing the of member a when

d . In his article Aslund failed to mention the credit boom in Estonia leading Estonia in boom credit the mention to failed article Aslund his In . not corporate money to money corporate emerge as one of the the of one emergeas

nr ctzn ol cm u wt a rpsl o t ipoe the improve to how proposal a with up come could citizen inary eeec ws ae o h overheated the to made was reference 117

the media and common peo common and media the

in Helsink in

hi i, s party s is hud olw t foses n implementing in footsteps its follow should ries

where h where main has pledged to bring bring to pledged has 31 was after formerWorld economist after ArdoBank was

, which is which ,

of Estonia in June 2012. On 2012. June in Estonia of

themes under discussion. discussion. under themes e concluded e – 118

the Reform Party Reform the

was set up in November 2012. The 2012. November in up set was ple. Instead,ple. forb idden that

economy and real estate estate real and economy the proposals proposals the

the Baltic countries had countries Baltic the in Estonia in they –

confessed publicly publicly confessed

a. T law. have been talking talking been have Rather they Rather November . The scandal The e oi of topic he that were were that

were 27 in th

CEU eTD Collection 121 120 119 toindependence.allusions and Lipstokdelivered and by connected to Ansip express ideas speeches The Lipstok. Governor Bank Central by speeches in guy” “good the as treated was t IMF.Conversely, the to serf a become would it austerity introduce not did Estonia if that said he when Laar by example guy,for bad the as portrayed even sometimes was IMF international the 1990s the ac benevolent in while that is difference largest The crisis. financial latest also were independence) discourse, domestic in actors international 1 early in emerged that discourse same the of characteristics that argued be can it Thus independence. to connected ideas of set a contains discipline) fiscal by generated trust the (about arguments of set second the that long confidence, arguments of set different three identify Kattel & Raudla during retrenchment fiscal chose Estonia why explaining In Summary are parties financed. how of topic the and politization participation, democratic elections, parties,

Ibid. &2011.Kattel Raudla & Raudla2012. Hope

references to international actors in domestic discourse domestic in actors international to references

tor was the IMF, during the latest crisis this role was taken over by the EU. the by over taken was role this IMF, crisis the latest wasthe tor during - 120 term view) term

ru ta te oe f icuss a vr important. very was discourses of role the that argue

that were used during the recen the during used were that

990s (fiscal discipline, international trust, references to to references trust, international discipline, (fiscal 990s

(common sense, fiscal discipline increase investor investor increase discipline fiscal sense, (common 32

fiscal

we the crisis H crisis the t financial crisis, crisis, financial t re present but there were few few were there but present re discipline, international discipline, trust observable ope & Raudla & ope lhuh they Although it can be seen seen be can it

during the the during he IMF he 119

The The and 121

CEU eTD Collection 123 122 Accord focus oneconomics. Times media‟s the circulationof terms in dailies Irish biggest response,two analyzing In response. public of level the or events key to relationship their a Bank Central the of Governor the and Lenihan Brian Finance for Minister Cowen, Brian Minister Prime period this during figures public key by speeches examined He 2009. March and 2008 AMasters bystudy theEarly stages crisis of other(politicians, actors scholars) whohave argued thatthecauses were crisis of internal. the home wholly are crisis the of causes the to refer the for blame main the put they because one previous the government new the of discourse the that Kenny Enda Minister opposition wi do not factors, external by caused was crisis the that argued government the subchapter this In Intro

l demonstrate ll Masters 2009. Masters 2013. &in Democracy Debt course in the finalmyessay inwere used also subchapter this Smallin parts duction – ing the study study the ing

2. the were considered. Responses in the in Responses considered. were

Ireland - findings

during the crisis. Next I will show through the speeches of the new Prime Prime new the of speeches the through show will I Next crisis. the during

nd

122 h psto o ohr oetc actors domestic other of position the John Hurley. Four key speeches of each person person each of speeches key Hurley.Four John 123

of the Special the of the politicians and the majority commentary in the media media the in commentary majority the and politicians the crisis the of stages early the in Estonia to similarly that show first will I

analyzes the political discourse about the crisis in crisis the about discourse political the analyzes

Commission of Commission - made. In addition, I will also also will I addition, In made.

Sunday Business were also viewed because of its its of because viewed also were Business Sunday 33

Investigation – –

crisis on domestic actors. Finally,I actors. domestic on crisis The Irish Independent and the Irish Independentthe Irishand The businesses, trade unions, unions, trade businesses,

to show that they found that that found they that show to differed considerably from from considerably differed were selected according to according selected were point to point Ireland between JulybetweenIreland

mestic. the position of of position the before March before political

Then I Then

–

CEU eTD Collection 127 126 125 124 economycalled was for. Also, costs. its cutting of aim the with reform sector public go the the hold to opposition the by attempts that concluded also They already known. well the of scope global the to reference a made Cowen time that at because factors causal the about reflection no was However,there crisis. the of severity the with agreed commentary media the of Most the improving and finances public in stability restoring it against measures take to proposed and years” seventy in crisis economic global profound 3 February on example, respons the of majority the that and government origi analysis The infinancialthe situation markets aslinked tothe sub viewed had authorities Irish the 2008 Julyconsiderably. fell Before revenues government the poli 2009

enet a a e avct fr aia plc cags Te oenet calle government The changes. policy radical for advocate key a was vernment Ibid, 143. Ibid, 149. Ibid, 127. Ibid, , 149. Ibid, tica crisis were largely unsuccessful. Finally, the study showed that the Fianna Fail Fail Fianna the that showed study the Finally, unsuccessful. largely were crisis s f h cii t b external, be to crisis the of ns thought that the causes of the crisis were external. were crisis the of causes the that thought l leaders first recognized first leaders l

financial crisis in every in crisis financial by Masters Masters by 127

rd

hwd ht h pbi fgrs ee ucsfl n otaig the portraying in successful were figures public the that showed the Prime Minister Cowen described the situation as “the most most “the as situation the described Cowen Minister Prime the

the influence of the global financial crisis in July 2008 when when 2008 July in crisis financial global the of influence the

speech which made it unnecessary to reinfor to unnecessary it made which speech that its eruption eruption its 34

s n h media the in es - prim was 124 e

opttvns o te economy. the of competitiveness crisis

eod h cnrl f h Irish the of control the beyond The scholar found that found scholar The mdriain f h Irish the of modernization a

government accountable for for accountable government in the US.

ged ih it with agreed 125

ce what was was what ce the Irish the . d for a a for d 126

For CEU eTD Collection 132 131 130 129 128 years.the huge economic oftheprevious success t risk the to to and sense common references reputation, international on based was measures austerity for justifications the Estonia to Similarly international investorconfidence. reputation and Sep in government the model. theeconomic adequatenessof fundamentalreview ofthe a require not did reputation international and competitiveness expenditures, public excessive p the in expressed commonly more became states. neo of normalization gradual Ireland in paradigm dominan existing the with line in was problems three these of identification The competitiveness andlossofinternational reputation. pr core three through depicted itself defending kept role a played that factors domestic the to pointed situa economic Ireland‟s when it. with cope to means governmental the had Ireland that argued was it that Dukelow

Lenihan2008. 62. Hay2007, 12. Dukelow2012, Cowen2010. 10. Dukelow2012, In Ireland the Ireland In 128

shares the view that in 2008 the crisisin Irelthe 2008 in that view sharesthe

program

which emerged in 1990s. in emerged which concepts by framing the crisis in the existing economic existing the in crisis the framing by me

tember 2008 when when 2008 tember

was released which released was - in politicians among assumptions economic liberal

of competitiveness, tax competition, tax competitiveness, of in eae aggravat became tion oblems: excessive growth in public expenditure, loss of of loss expenditure, public in growth excessive oblems: olitical discourse. Thus, framing the crisis around around crisis the framing Thus, discourse. olitical 35 also 130 they justified the banking guarantee with with guarantee banking the justified they

132

Accordi in the crisis. the in echoed the above view. In 2009, however,view.2009, above In the echoed

129

ed

and wasand hat any other way would jeopardize jeopardize would way other any hat analyse , ng to Hay to ng Nevertheless, the government government the Nevertheless, The same frame was used by by wasThe frameused same framed as an as framed s started to appear which which appear to started s and light and paradigm 131 In December 2008 a a 2008 December In

the mid 1990s saw a saw 1990s mid the

touch regulation touch . The crisis was crisis The .

threat and addsandthreat

Anglophone Anglophone t economic t

CEU eTD Collection 138 137 136 135 134 133 taxation. government the of view the t of competitiveness the increase to wages cutting of logic expenditure. public excessive by caused was crisis the that diagnosis the challenged unions trade When arguedfor radically different measu actors society civil other and unions trade the 2008 since austerity for argued government deregulated and “privatized on the of flaws the proved crisis the because economy the of realignment” “fundamental a for called Sweeney Paul (ICTU) Unions Trade of Congress a for th leaders business the and government the of narrative the to contrast In for c a super competitive more a for call only not did representatives business the that was demand for unions public the target pu excessive to related largelywere crisis should government the of the and discourse The Other domestic actors

Dukelow 2012, 14; Regan2011,14; 486. Dukelow2012, 15 Dukelow2012, 2009. Sweeney 13 Dukelow2012: Murphy2009. 13. Dukelow2012,

major

increase its attractiveness in the eyes of eyes the in attractiveness its increase 138

paradigm shift paradigm ompetitive economy.ompetitive

. Irish Business and Employers Confeder Employers and Business Irish . diagnosis

135 . For example, in January 2009 the economic adviser to the Irish the to adviser economic the 2009 January in example, For .

that by the representative body of employers employers of body representative the by 134

ultra res, includi res,

ing excessive wages. excessive ing ulc xedtr ws h cau the was expenditure public

oiat icus i as entailed also it discourse dominant - re markets”. free blic expenditure blic 36 ngfiscal stimulus.

foreign investors and that the causes of the of causes the that and investors foreign 136 “redundant economic model” based based model” economic “redundant The difference with the government the with difference The

. he economy he 133 While business leaders and the the and leaders business While ation (IBEC) argued that Ireland Ireland that argued (IBEC) ation

This allowed the government to government the allowed This 137

e f h polm not problem, the of se

and argued contrary to to arguedcontrary and They e trade unions unions trade e was similar to similar was

usinn the questioning questioned the the questioned

economy but but economy called called that that CEU eTD Collection 143 142 141 140 139 143 down”. them let has feel people many which system, political the of criticism justifiable been the but elections 2011 the before Party) Green Fein, Party, Sinn Labour Gael, Fine Fail, (Fianna parties major the all of manifestos the in was citizens‟assembly a of sort some Establishing relation the to in deal the renegotiate to promise clear a entailed it time same the At 2010. December in programsigned bailout EU/IMF the in down laid reforms) structural and consolidation (fiscal “Pr Their position. austerity was Gael P Labor the with coalition a formed They elections. Parli Irish the to elections were there 2011 Spring In weakness the union of l a to due was partnership social the of breakdown agr partnership national a without December 2009. the T he disagreement about whether excessive public expenditure through wage demands was was demands wage through expenditure public excessive whether about disagreement he

Gilmore 2010. Gilmore 17. Ibid, 16. Dukelow2012, 487. Ibid, Rega

idea was first proposed in April 2010 b 2010 in April proposed first was idea as o te rss a oe f the of one was crisis the of cause 139 n 2012, 484. n2012,

h sca prnrhp ak wr iiitd n Ja in initiated were talks partnership social The . critical of Fianna Fail in playing a part in the crisis but they did not take an anti an take not did they but crisis the in part a playing in Fail Fianna of critical

t a te is tm i te rvos 3 er we te onr ws operating was country the when years 23 previous the in time first the was It

unjust interestunjust rate.

s compared to the government.s compared tothe

ogramme for Government” showed support for the objectives objectives the for support showed Government” for ogramme

142 eement.

reason In general, Regan general, In y the Labour Party on the grounds that “There has has “There that grounds the on Party Labour the y 37

s

h te oil atesi da fie in failed deal partnership social the why ack of political support and support political of ack

arty. I arty. ament. Fine Gael was the winner of the the of winner the was Gael Fine ament. n the run the n 140 ur 20 bt olpe in collapsed but 2009 nuary

and Dukelow and - up to t to up he elections Fine Fine elections he 141

to argue that thearguethat the relative relative -

CEU eTD Collection 148 Facility. Stability Financial European ofthe head he became the 2010 147 146 145 144 of Commission Statutory a of up setting the involved investigation the of stage second The their report second the delivering experts independent the as selected were (British) Regling Klaus German and Honohan Patrick stages two had inquiry The Special presented inCroatia inJune. for prepared was paper first The domestic. were factors main the that concluded he where Ireland is crisis the of causes the examining papers research two wrote he appointed being before months few a Just 2009. September Governo the became economist, Bank World former Patrick by proposed special committee toi 19 January On of votes inthe as such politico the that view The

Watsonthefor IMF, worked has ofEngland. the and Bank Commision the European Byrne 2011.Byrne RossShane O‟Riain Regling has worked for the IMF,the for worked Com has Regling European

extensive internationalextensive anddomestic experience int - Shane Ross Shane Investigation economic de economic

2008; 2009, 2010 2009,

th 2011 elections Niamh Hardiman 2010a, 2010a, Hardiman Niamh

2010 the Finance Minister Lenihan Minister Financethe 2010

145 ass f h cii wr mil itra o cnen aot h Irish the about concerns or internal mainly were crisis the of causes velopment model has been raised by several scholars several by raised been has model velopment Honohan during a meeting of a of meeting a during Honohan nvestig

by an “independent wise man or a woman a or man wise “independent an by , a fo a 147

– rmer member of the Senate who won who Senate the of member rmer oehr ih n diinl ponmn o a a Watson Max a of appointment additional an with together

ate . in the first stage two preliminary reports were were reports preliminary two stage first the in

146

the origins of the crisisthe origins ofthe

2010 b, 2012; Patrick Honohan 2009a, 2009b; 2009a, 2012; Patrick Honohan b,

mission and for the German Ministry of Finance. On July 1st 1st July On Finance. of GermanMinistry the for and mission the World Bank in May and the second paper was was paper second the and May Worldthe in Bank 38

announced that th that announced

Parliamentary Committee. Honohan, a a Honohan, Committee. Parliamentary . He mentionedthere r of the Central Bank of Ireland in in Ireland of Bank Central the of r he field.

with relevant expertise”. Aexpertise”. relevant with the second highest number highest second the ere is a need to need a is ere

Philip Lane Philip 2010 144 to be written be to

that the idea was was that theidea

and politicians and because of of because set up a up set

-

148 by by

CEU eTD Collection 154 153 152 151 150 149 misjudged whose by theauthorities actions and warnings undetected went risks attendant The expansion. this support u banks the by financed bubble property the of expansion unhindered the was however, reason, main world by exacerbated was crisis the of severity and speed “The “home wa yet it influences, globalof imprint clear Ireland‟sthe bears crisis banking classic.” crisis, banking Irish the of depth and intensity timing, the to contributed pressures international although short, “In propertybig bubble playeda role init. report three All report final The 2010. September in established formally was and 2010 July in Parliament the by approved was Commission the of formation inquiry. The the conclude to expert independent Nyberg inquiry.Peter the complete would Investigation

Nyberg 2011, 91 Nyberg2011, & Regling Watson 5 2010, 22 Honohan2010, Nyberg2011. Ministry. Finance Finnish the and IMF the Finland, thefor Bankof Nybergworked has http://www.bankinginquiry.gov.ie/ 151 - made.” sing wholesale market funding. G funding. market wholesale sing 152

was in published April 2011.

149

153 cnitn o “ rcgie epr o hg rnig n rptto” that reputation” and ranking high of expert recognized “a of consisting , cnldd ht h mi cue o te rss ee oetc n ta the that and domestic were crisis the of causes main the that concluded s .

.

.

h esnil hrceitc f h pro the of characteristic essential the

Toexample: givean 150 overnment policies and pronouncements tended to tended pronouncements and policies overnment , a Finnish economist, wa economist, Finnish a , 39

were modest and insufficient.”were modestand

- wide ec wide or were at least seriously seriously least at were or blem was domestic and and domestic was blem s appointed as the sole the as appointed s onomic events. The events. onomic

s in crucial ways crucial in s 154

CEU eTD Collection 157 156 155 brick economy cards. of house a like collapsed that property and debt on based cards. of house a on based 2013 Jobs for Plan finances public the in inherited we deficit underlying massive export Fail Fianna recent of legacies economic other Ireland:development model of On fit for the21st politi w responsible. are institutions poor a only was imply Kenny system.” banking our of collapse effective the about brought has institutions, Kenny crisis Programm Government second his of beginning the In country. the g of 2011,t in Elected Prime new The Minister overnment ih nldd rfr o te iaca sco, ulc fina public sector, financial the of reform a included hich Kenny2013. Kenny. Enda Enda Kenny Enda re De - cal reform and establishing a Constitutional Convention “to give Ireland a Constitution Constitution a Ireland give “to Convention Constitutional a establishing and reform cal ulig f h coun the of building -

ce n FDI and br 6 mber 155 . Speech given 15 March 2011. March 15 given Speech .

Speech given 25 February 2011. February given25 Speech

that the crisis was brought about international factors and that the Irish state state Irish the that and factors international about brought was crisis the that , ad ht A alr o rglto, n irresponsible and regulation, of failure “A that said Century”. - by he used phrases like the like phrases used he th - he new Pri new he e eooi mdl duri model economic led -

brick, making it stronger, ensuring that successes gained are here for the the for here are gained successes that ensuring stronger, it making brick, itm in victim 02 introdu 2012, t a suggested was it fr ainl Recovery National for e

Togiv r. n i frt speech first his In try. me

n h sec Kny rpsd a proposed Kenny speech the In

a great storm. Instead, he said that the domestic financial financial domestic the that said he Instead, storm. great a

“This requires that we tackle with equal determination the two equal thetwo thatwe withdetermination “This tackle requires Minister e an example: an e ig h 21 B 2013 the cing

ht h peiu development previous the that

Enda Kenny Enda “re creation”, “re creation”, g h credit the ng 40 - public public

“The previous Government built an economy economy an built Government previous “The e Governments led ” 156

n ac 8 01 wie oiaig his nominating while 2011, 8 March on udget, Kenny made a reference to the the to reference a made Kenny udget,

- (Fine Gael Party) Gael (Fine

speech eadn the Regarding construction” and “re and construction” - fuelled property boom, and the the and boom, property fuelled

157 cs pbi srie reform, service public nces, n ac 1 2011 15 March in . ” hruh oetc reform, domestic thorough

- In the Government the In

h dmg dn t our to done damage the

We are rebuilding our our rebuilding are We ass f h banking the of causes model behavior

has has stressed

of Ireland was was Ireland of

invention Not once did once Not

n financial in –

the “O

Action n the the n need need ” of a CEU eTD Collection 163 162 161 160 159 158 2010. in bailout the before talks in up came bondholders to losses any imposing not of issue The 2011. in failed of burden any share to refused ECB the towards resentment issue to Ireland have situation the of Twoaspects 2010 and governmental skyrocket to 95% debt in2007to 2010. from 25% in bailout the of EBS. the and Society Building Nationwide Irish Permanent, & Life Irish Irish 6 the of liabilities actually from contributions with a 2010 December In International actors national bankruptcy. of brink the to State this brought that policies banking disastrous the undoing is Government notes Feb On long term.”

Ibid. 2011,Ibid, 803. &Kirby 2011, 809. Thorhallsson Kenny2013. 2013. Smith and Spiegel 2013 Jobs Department of 159

to achieve any burden any achieve to

ur 7 ruary tre n 08 hni Se in when 2008 in started en hl te oetc ak acutbe o te rss “Step crisis: the for accountable banks domestic the held Kenny

158

th

rae cnieal wih asd h dfct o ug t 3% f D in GDP of 32% to surge to deficit the caused which considerably creased

163 bakt urne fr h bns in banks the for guarantee blanket a 03 n n noneet ocrig h rpaeet f promissionary of replacement the concerning announcement an in 2013

160

85 billion euro Irish bailout package was concluded by the EU and IMF and EU the by concluded was package bailout Irish euro billion 85

h fc ta Lnhn icse te da f moig oss o losses imposing of idea the discussed Lenihan that fact The

-

.

owned banks owned

Sweden - sharing was discussed during the run the during discussed was sharing stems

the adjustment in the bailout. the in adjustment the , the UK and Denmark. The events that led to the bailout bailout the to led that events The Denmark. and UK the ,

been criticized in criticized been

from the fact that they demanded a high interest rate and rate interest high a demanded they that fact the from ptember Ireland announced that it would guarantee the the guarantee would it that announced Ireland ptember -

Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Ireland, Anglo of Bank Bank, Irish Allied 41

Ireland. First, Ireland. September 162

The issue that the governmentthe that issue The - up to the general elections general the to up that the ECB had advised advised had ECB the that 2008 However, the costs costs the However,

. 161 -

by h second The - tp this step, n

CEU eTD Collection 168 167 166 165 164 made government Irish the speech. every virtually in crisis the s because view that external. were crisis the of First Summary people butinNovember2011 thenumber of hadto24%. supporters diminished office took government new the after right banking the after 2008, October in but EU the trust to tended Irish the of 62% 2008 that April in crisis shows the before which data Eurobarometer by confirmed is EU the towards attitude negative C the that Ireland in view crisis. the before Ireland for unsuitable were rates interest low ECB‟s the that was made he point o hope the in banks Irish moneyto lent banks letter becausecountries‟Europeancrisis the in Barroso. role aplayed ECB the Bruton to According open an wrote he when 2011 early in Bruton John Minister Prime Ireland in crisis the creating is ECB the of role The FranceGermany. and idea the of favor in was Chopra A.J. mission also is bondholders

Masters 2009; Dukelow 2012, 2011 Dukelow2012, 2009; Masters Interactive. Eurobarometer 811 &Kirby 2012, Thorhallsson 2011. Bruton 9. 2012, Breen I sho I According to to According wed that during the early stages of the crisis the government argued that the causes the that arguedgovernment the crisis the of stages early the during that wed

guarantee, the number was shot down to 50%. Another decline happened decline Another 50%. to down shot was number the guarantee, imilarly to Estonia the government made government the Estonia to imilarly Kirby & Thorhallsson & Kirby

hrd y Breen by shared

168 miso ad h EB a tetd h cuty unfairly. country the treated had ECB the and ommission references to international reputation, common sense and to the to and sense common reputation, international to references

.

Until March 2009 most of the responses in responses the of most 2009 March Until .

When justifying austerity measures similarly to Estonia Estonia to similarly measures austerity justifying When 164 . codn t Ben vn h lae o te IMF the of leader the even Breen to According – 166

42 f profiting from the real estate bubble. estate real Athe profitingfrom f second in May 2011 the EU was trusted by 44% of the the of 44% by trusted was EU the 2011May in

but but hs eape acrtl rfet h general the reflect accurately examples these

eventually it was shot down by the ECB, ECB, the by down shot was it eventually was se was riously taken up by Irish former former Irish by up taken riously references to the glo the to references

the media accepted media the 165 167

o President to bal scope of of scope bal

The CEU eTD Collection various Committee, Investigation Special Minister Prime the new the to of crisis rhetoric the of stages early the in Haarde Minister Prime the of rhetoric the contrast subchapter this In Introduction governmentafter the tookofficegovernment finallychangednew 20 inMarch partnership disa re fundamental a escape to government the allowed way that in crisis the Portraying reputation. international of loss and competitiveness through depicted mid the in Ireland in popularity win to started that discourse neoliberal home o causes the into investigation an also which papers home the to pointed which the of because Sha economy” Senate the the of Member of model”. economic “redundant realignment “fundamental a needs country the that argued unions trade The discourse. dominant the challenge to started actors several 2009 In risk that greement about the nature of the economic problem led to the breakdown of the social the of breakdown the to led problem economic the of nature the about greement - grown. 3. other putthe previous ways economicsucces would

Iceland in December 2009, in December

Nevertheless, Nevertheless, concluded that the underlying causes of the crisis were domestic. domestic. were crisis the of causes underlying the that concluded

he cnrl rbes ecsie rwh n ulc xedtr, os of loss expenditure, public in growth excessive problems: central three I will first give an overview of the political reactions to the crisis and then and crisis the to reactions political the of overview an give first will I

- grown nature of the crisis. In addition, scholars started to publish publish to started scholars addition, In crisis. the of nature grown the government kept defending itself by framing it through the the through it framing by itself defending kept government the for the first time in the previous 23 years.firstfor inthe previous time the23 Si f the crisis which concluded that the main causes were were causes main the that concluded which crisis the f udrotr hn I Then durdardottir. parties and the people the and parties 43 - hn o te curre the of think

e os ulse hs is book first his published Ross ne s of the countrys ofthein jeopardy. ie voice give –

to demonstrate to t cnmc oe. The model. economic nt -

1990s. The crisis was was crisis The 1990s. to

The discourse of the the discourseThe of

te actors other 11.

that There was was There there is there –

the the

CEU eTD Collection 169 crisis. the of causes that he said In words, other US housing market. conseq the facing before. ever than nation the of life of standard the improve to more done has that expansion rapid of period a of wake the in downturn economic traditional sit economic our of challenges “The Haarde factors external by caused the Initially NarrativesPrime Minister the by was thefirst a time center It 2009. April in elections general the won also alliance same The Minister. Prime new the Left The and Alliance 1 February on coalition Democraticminority a formed Movement Social The down. stepped government the which after 2009 Januaryin intensified and 2008 October in already started protests Sporadic h they Iceland protests, small few very by met were which packages 3 in measures austerity implemented government the Estonia in While Estonia. p the hit, crisis the After that but crisis disagreement various over the of causes the about discussion

Haarde, 2 September 2008. September2008. 2 Haarde,

s aid

in the second in the second crisis was perceived perceived was crisis uences of an international financial crisis in the wake of difficulties in the in difficulties of wake the in crisis financial international an of uences ”

169 iial t Etna h Etna Prime Estonian the Estonia to Similarly

- http://eng.forsaetisraduneyti.is/news and third .

left governmentleft was i ltcl ecin i Iead ae en ey tog oprd to compared strong very been have Iceland in reactions olitical

fundamental issues. In his Address to the Parliament, the Althingi, i the Althingi, Parliament, the to his Address In traditional economic downturn and the US housing market are the are the market theUS housing and traditional economicdownturn

by the Prime Minster of Iceland Geir Haarde Geir Iceland of Minster Prime the by

paragraph: uation are essentially twofold. First, we are facing a a facing are we First, twofold. essentially are uation 44

n power in Iceland in 18 years.Icelandpower in n in18

st

- 2009. Johanna Sigurdardottir became became Sigurdardottir Johanna 2009. and among Icelanders there is much much is there Icelanders among - articles/nr/2999 ad a “Kitchenware Revolution”. Revolution”. “Kitchenware a ad

…

iitr h Minister On the other hand, we are we hand, other the On

n September n also e

to have been been have to argued - Green Green 2008 2008

the the CEU eTD Collection 173 172 171 170 wasamending “the theConsti process of transparent their in motive central a but crisis the not did they February officein took government new the When GovernmentNew to atempest while makingreferenceclouds”. a to“storm I a such volcano. as phenomenon Minister Prime the time ill was system banking eruption the in factors domestic On busi markets”. “ to due crisis” economic major a experiencing is world call He crisis. financial are they that repeated PM the 2008 October in releases press his In bycrisis. the and economy the of openness

H December 2012. 5 Haarde, 08/ No. CountryReport IMF September2008. 3 Haarde,

a oebr 5h te IMF the 25th, November ness between banks” a r d e ,

3 1 h cue f h cii acrig o i was him to according crisis the of cause The

democracy D

172 e c

e (Dec 5 (Dec m b

e n the New n the Year‟s Address r

2 0 th

ed the crisis “an economic natural disaster” and added that “the whole whole “the that added and disaster” natural economic “an crisis the ed - 0 n mr oe ad oet society. honest and open more and positioned to cope with the global the with cope to positioned ) 8 .

. http://eng.forsaetisraduneyti.is/news

http://eng.forsaetisraduneyti.is/news 170

and et i nraie H cniud o ota te rss s global a as crisis the portray to continued He narrative. his kept http://eng.forsaetisraduneyti.is/iceland_org/nr/3303 362

.

the size of the banks it was in was it banks the of size the in the second paragraph second the in

published a Staff Report where they made references to the the to references made they where Report Staff a published f h crisis: the of st atements tution byatution special referendum”.

45 in 2008

was the commitment to increased and more more and increased to commitment the was

“Iceland‟s 173 - - compared it to it compared and and turbulences

in the third paragraph he compared it he compared paragraph in the third - - financial turmoil financial articles/nr/3282 “ evitable that Iceland would be hit hit be would Iceland that evitable articles/nr/3031 One of the promises they made made they promises the of One complete overstretched; directly

in international financial international in

facing ak f ofdne in confidence of lack

a natural catastrophe, natural a address the causes of of causes the address

171

an international an over .”

At the same the At - leveraged leveraged

CEU eTD Collection 175 174 more rigou sufficient with role enforcement their fulfil to failed institutions regulatory and government our situation, this greedy with Faced of binge a on abroad w conquest commercial far travelled had entrepreneurs” “expansion Icelandic government andregulatory institutions crisis the for actors domestic blamed crisis. the of causes the about th After Progressive Party and t opp of because adopted been 2012. not has October constitution the However, in referendum a in adopted was resources, natural of ownership state the crowdsourcing of method cons new a out worked which 2010 in up set was Assembly Constitutional A new chapter inpublic participation”. possible” are heard. increase made have they that mistakes the from t about talk explicitly Governmen the of “Platform the on speech her In

S S i i g g

u u solid financialsolid than before,onreal foundations andcreation. value r r d d a a eetos n ac 20 te rm Minister Prime the 2009 March in elections e r r eorc i te society the in democracy d d o o t t t t i i r r , ,

18 June 2009. June2009. 18 February 6 2008.

The idea of a constitutional assembly idea a of The he causes of the crisis but emphasized but crisis the of causes he he Independence he Party hich left behind smoking ruins, not only in Iceland but also abroad. also but Iceland in only not ruins, smoking behind left hich

. The new constitution, which included the right to the internet and and internet the to right the included which constitution, new The .

http://eng.forsaetisradu

http://eng.forsaetisraduneyti.is/news In June 18 June

and make sure that the voiced of “as many people as as people many “as of voiced the that sure make and 175 r .

th 174 … :

– 2009 on th on 2009 . We have to reconstruct business and industry on on industry and business reconstruct to have We

cnrl hm i te peh a te ed to need the was speech the in theme central A the greedy entrepreneurs and the failures of of failures the and entrepreneurs greedy the 46 - neyti.is/news

in the P

t” e National Day o Day National e

in February the Sigurdardottir the February in arliament.

started to make stronger statements statements stronger make to started

- was proposed which would open “a “a would open which proposed was and - and

- articles/nr/3783 that the country needs to learn learn to needs country the that - articles/nr/3387 osing forces osing

f Iceland Sigurdardottir Sigurdardottir Iceland f

– titution titution

including the the including

i not did with a with

CEU eTD Collection 177 176 and sector T and react,self to authorities governmental of failure the haste, much too with acted which banks Icelandic management, super weak as such factors domestic several by caused largely was crisis the The report Investigation Special been be ourstrongest and continue will to weapons.” hav cooperation international close and law of rule the democracy, respect, that In society. our of elements many of review fundamental a for called has This failed. utterly market free admin the failed, politics directly factors.a domestic number onof 12 April on statement official its in it welcomed t published was Committee Investigation Special the by report the When the greedyIceland‟s of who thehealthyfoundations undermined people economy. an neoliberalism of ideology “the because foundation” new a on society the “reconstruct to need Parliamentary the Opening “Mistakes were certainly made. The private banks failed, the supervisory system failed, the the failed, system supervisory the failed, banks private The made. certainly were “Mistakes he Working he Specia d unrestricted markets has collapsed”. She also said that power needs to be removed from removed be to needs power that said also She collapsed”. has markets unrestricted d S

i failurecommunication between in public officials. g u r d l Investigation Committee 2010. Committee l Investigation a r d 177

o h pltcl etr n cnldd ht h picpl rbe ws te flawed “the was problem principal the that concluded and sector political the t t i

r by the Special Investigationby Special Committee the , Group on Ethics analyzed the morality of the financial sector, administrative sector, financial the of morality the analyzed Ethics on Group

5 October 2009. October 5 Committee - lending the banks, too much risk takin muchrisk too banks, lendingthe

istration failed, the media failed, and the ideology of an unregulated unregulated an of ideology the and failed, media the failed, istration Session in October in Session

http://eng.forsaetisraduneyti.is/news

47

20 0 th 9

, published , published in April 2010,

00 utn te lm fr h crisis the for blame the putting 2010 the Prime Minister said that there is a is there that said Minister Prime the

- and g,cross - articles/nr/3948 - financing, weak equity equity weakfinancing, he government fu government he

concluded that iin weak vision, 176

lly lly e CEU eTD Collection 178 had citizens whose Icesave besaved. theNethand depositsnot would awiththe UK conflict This sparked but a give not did government Icelandic the Ireland, to contrast stark In Other actors banking “reckless by about practices”“the overheating and the economy of brought was crisis the that said Arnason Arni Economy of crisis tobe “wary is unfetteredcapitalismfinancialization andthe of the from learn to lessons important most the that added was it nevertheless but storm” perfect the In and Bank Central the of internationalas PaulKrugman guestssuch Stiglitz. and Joseph representatives universities, Icelandic from representatives Johanna Minister Prime the included participants 27 October on and Program Recovery Economic IMF‟s the completed Iceland 2011 August In high The helped tofacilitateevents. the whose media the at also F obligations”. primary their respect to “failed administration public and institutions supervisory the that and much too bankers the trusted politicians the that added sh large gained owners inexperienced where banks] [of privatization of process

th IMF IMF , 2011 a high a 2011 , announced that only domestic liabilities would be guaranteed which meant that foreign that meant which guaranteed be would liabilities domestic only that announced speech given by the P the by given speech I c e l - a level conference n d

C

o n f e - r level conference was held in Reykjavik to review the achievem the review to Reykjavik in held was conference level e

money on Icesave accounts becau accounts Icesave on money n c e

2011.

dominant discourse about the uni the about discourse dominant

rime Minister rime

178

it was mentioned that that Iceland “was hit by a by hit “was Iceland that that mentioned was it 48 the years the before”.

Sigurdardottir se they gave an unusually high return. return. high unusually an gave they se qu

e success of Icelandic bankers bankers Icelandic of success e ,

h Mnse o Economy, of Minister the of s full banking guarantee banking full ociety ingers ingers ”. ”. The Minister were pointed were ares”. ents. The ents. erlands They They CEU eTD Collection 184 183 182 181 180 179 payIcesavedepositor foreign back that fact the by implied also recovery to path its on economy Minister 2009 July in Revolution the after shortly o most 2009 membersh EU supported voters of majority the crash the before because the settling dispute. Iceland Icesave on conditional it making Iceland to assistance IMF‟s blocked states location. s small nation, the of uniqueness the of because own their on stand c debates 2013. March in Europe Parliamentary Act law into twice referendum a on put reality,thes In debt. the repaying on agree to order In abroad. Landsbanki of assets the freeze to TerrorismAct the used UK The risis came to became to be seen by the ordinary people as evidence that the country should should country the that evidence as people ordinary the by seen be to became to came risis Milne2013 Haarde 17 17 Haarde A Graham, &2011 Graham,Bailes Thorhallsson 809 &Kirby 2012, Thorhallsson 809 &Kirby 2012, Thorhallsson a bailout an Free T an years three nearly for 180 rud ht U ebrhp s nrae te stabi the increases is membership EU that argued

Bailes &2011, Bailes 99 Thorhallsson

a

T . with the IMF the with f the people are opposed to it. to opposed are people the f pril 2009. pril he

According to According 181 rade States. court AssociationThe nationalistic feelings feelings nationalistic

h pbi oiin a cery en fetd y h Ieae dispute Icesave the by affected been clearly has opinion public The

. Eventually t Iceland had to agree to preconditions with the UK and Holland on on Holland and UK the with preconditions to agree to had Iceland when the when i 21 ad 2011) and 2010 (in . .

Kirby & Thorhallsson & Kirby -

rm h crash the from 183 e preconditions have not been followed. The issue has been been has issue The followed. been not have preconditions e .

s .

their ratingpoll 15% suddenly to30%. jumped from . The idea that nationalistic feelings played a large role is role large a played feelings nationalistic that idea The

Progressive Party started to argue that does not have to to have not does arguethat to started Party Progressive also stem from the view that the EU and EU the that view the from stem also he case was was case he because the because 182 49

Nevertheless Iceland applied for membership for applied Iceland Nevertheless

ni te eod referendum. second the until

eas te rsdn rfsd o sign to refused President the because

ruled handed overhanded 179

So

the Icesave issue dominated political dominated issue Icesave the

cial Democratic Party and the Prime Prime the and Party Democratic cial in fa in vor lity and the credibility of the the of credibility the and lity

to of the Icelandic government government Icelandic the of the Court of Justice of the ofthe ofJustice Court z ad geographical and ize p u sne early since but ip

T e economic he

its member its 184

the

CEU eTD Collection 190 189 188 187 186 185 right the by controlled largely was which media the by supported was Vikings old I Summary who gobenefits” come rehab and into back toreapthe then neocons, the of party cocaine the after vomit the up clean they leftwing: the of problem the is in resources. Parliament the in seats 3 won that Party Pirate the of naturalhead Jonsdottir,the Brigitta of privatization the support also They haven. tax Nordic a as Iceland of vision a have and storm perfect a by hit was it that domestic, not was Iceland balderdash”. “utter Sigurgeirsdottir crisis the to contributed party his that Part Independence the with coalition (26.7%). in elections the in because t and people officeafte took that government the Independency 7.1% n are indicators crisis the IMF during The policies issues. economic of unorthodox variety government‟s a over split are people the However, n the run the n M M Valdimarsson 2012. Wade142 Sigurgeirsdottir and 2012, Wade141 Sigurgeirsdottir and 2012, M i i i l l l n n . Nevertheless, Nevertheless, . n e e e , ,

2 2 2 187 0 0 0 1 1 1 -

up to the crisis the euphoria about the “Icelandic outvasion” and comparisons to to comparisons and outvasion” “Icelandic the about euphoria the crisis the to up 3 3 3

The leader of leader The c c b . . a te needne at wud e re be would Party Independence the hat .

Party has somehow managed to convince the majority of the population that population the of majority the convince to managed somehow has Party 189 ot bad bad ot

the majority of the Independence Party members believe that the crisis in crisis the that believe members Party Independence the of majority the

codn t Wade to according –

gr economic the runner the

April . .

r the crisis is somehow responsible for the troubles of the of troubles the for responsible somehow is crisis the r - up of the elections elections the of up 03 h Idpnec Party Independence the 2013 owth was 2.6% was owth y from 1995 from y

n Sigurgeirsdottir and 50

- 2007, Gunnlaugsson h Gunnlaugsson 2007, % in 2011 and un and 2011 in % - elected –

the Progressive Party Progressive the . 190

Th . 188 186

codn t Wade to According is prediction was correct correct was prediction is h pls hw ht the that show polls the and

and h ms votes most the gained employment was only only was employment Iceland‟s as called the claim the called as a praised has –

n contra In who was in was who

economic 2013 185 - wing wing

: and the “It st, CEU eTD Collection 192 191 an been has there Iceland In adopted. be will it that chance a still is there but Parliament the healthier much been have Iceland solved from far is there crisis political the Iceland in events the romanticize to easy is it Although 2008”. decision also is Iceland is situation constitu new the and resources natural of fate the membership, EU conclusion, In nationalistic feelings economicand hardship from stemming expensivemortgages. Party.Pirate the by challenged strongly is view This internal. not external, were crisis the of causes main “utter crisis the for responsible was party balderdash”. his that view the called Party Progressive run the However,in domestic. wholly been had crisis the publ was report the When crisis. the for accountable actors domestic holding was she published was Committee Investigation country. the in solidarity and democracy,transparency discourse of kind this continue not did Party Democratic Social the from Minister Prime new The tempest. a and storm eruption, volcano Haarde Party. Independence

Thorhallsson & Kattel 2012, 15 2012, & Kattel Thorhallsson Wade137 2012, & Sigurgeirsdottir

192 because of disagreements over fundamental issues fundamental over disagreements of because rmd h cii a a threat a as crisis the framed - making framework based on consensus has not been the outcome of the crash in in crash the of outcome the been not has consensus on based framework making

He since adds thecrisis even that have there been

The Progressive Party has gained support by taking advantage of b of advantage bytaking support gained Partyhas Progressive The Their former coalition partner coalition former Their Icelanders are divided over a number of issues of number a over divided are Icelanders 191

In the early stages of the crisis in the rhet the in crisis the of stages early the In

. hrd y hralsn Kte wo say who Kattel & Thorhallsson by shared

.

ished she fully agreed with the conclusion that the causes of causes the that conclusion the with agreed fully she ished

tha

n in Estonia in n while making references to natural disasters such as as such disasters natural to references making while –

51 the Independence Party Independence the -

ins . The new constitution has been blocked in blocked been has constitution new The . ed h rieae te ed o increase to need the reiterated she tead Even before the report by the Special Special the by report the before Even - . Nevertheless, political reactions in reactions political Nevertheless, . up to the elections the leader of the of leader the elections the to up

more conflictsmore –

e.g. the causes of the crisis, the of causes the e.g. oric of the Prime Minister Prime the of oric – tion. This view of the the of view This tion.

also believed that the the that believed also

than before. than ht a corporatist “a that y the people‟sythe

CEU eTD Collection Pirate Party Democratsand makealsoheard. the Social thatthealternative sure is view Independe domestic. were causes main the that found which crisis the of causes the investigationof nce Party and the Progressive Party do not agree with this but there is at least the least at is there but this with agree not do Party Progressive the and Party nce

52

The The CEU eTD Collection 194 193 pre the to due that argue they factors, sociological Regarding in ineffectual were society civil and unions trade the that and austerity to alternative viable any propose not did opposition the that suggest they factors), (rational groups interest Regarding academic euro the joining of goal pre a independence, regaining since policies economic alternative in experience no had has Estonia austerity, with crises authors the that factors historical The capacities makes diffic it economic alternative of underdevelopment the because crisis the of causes the discussed neoliberal dependent Eston of underdevelopment the in resulted and discourse. neoliberalThis dominant a of development the in role a factorsplayed sociological rational historical, that claim They 2009. in retrenchment fiscal for opting Estonia‟s Kattel and Raudla Chapter 3:

Hope & Raudla2012 Hope Raudla spurringchange. - existing unwritten rule of following conservative fiscal policies was reinforced by the the by reinforced was policies fiscal conservative following of rule unwritten existing &

discipline has developed hasdiscipline inEstonia along neoliberal lines.

Kattel Analysis 2011 193

. .

epne o h cii.Ti ter as epan wy soi hs not has Estonia why explains also theory This crisis. the to response n Hp & Raudla & Hope and

ult todiscussalternativeult economic ideas.

- oe n meig h Matih ciei.As, cnmc a an as economics Also, criteria. Maastricht the meeting and zone nd the rule of a balanced budget has been held in high regard. The The regard. high in held been has budget balanced a of rule the nd

mention are the following: Estonia reacted to previous previous to reacted Estonia following: the are mention ia‟s economic policy capacities, leading to a path a to leading capacities, policy ia‟seconomic 194 53

ru ta discursi that argue

- crisis economic success of the of success economic crisis

e ntttoaim explains institutionalism ve

- CEU eTD Collection 195 sociological by explained be can people the of reactions and actions the and corporatism by explained be can governments the of reactions and actions the that argue I people. the analysis of levels two between differentiate I Two analysislevels of have changeexplanatory strongerinexplainingpower the inthe narratives. and international discursive, pl factors economic sociological, rational, historical, how analyze will I Next, discourses changed they intheseEstonia whereas twocountries, didnot. even because Iceland and Ireland of cases the study to important is it why is This change. about bring could who actors no simply are there that constrained so becomes discourse public in actors of number Raudla and Hope theeurojoin and policies fiscal conservative maintain to objective Estonia‟s approving by influence an euro the ofmember become a to Es addition, In measures. austerity implementing for media international the by praised was Estonia because influence had actors international that add also authors The favorablegovernment duringcrisis. of the the economy.Estonian the of al pillars” They“holythree the as seen to came rate tax flat and board currency budget, balanced the 2000s and 1990s

Hope & Raudla2012 Hope - zone. 195

ayed out in the Irish and Icelandic cases to see which factors are likely to to likely are factors which see to cases Icelandic and Irish the in out ayed .

conclude that Esto that conclude

s hy r as sml plte wt cmuiaie icuss the discourses, communicative with polities simple also are they as

- zone in 2010. My research also pointed out that the IMF the had that out pointed also Myresearch 2010. in zone nia exemplifies a case where in a simple polity the polity simple a in where case a exemplifies nia 54

–

the level of the government an government the of level the so mention that mention so trust in government in trust

tonia was invited was tonia d the level of level the d

was was CEU eTD Collection 199 198 197 196 intermediate been 72%. of average OECD the to compared 64% was elections existe if low very historically a had has Estonia government not. and63% did in trust Iceland low In been low. also extremely has was government government in trust that fact the no by did Estonia explained but change discourse a experienced Ireland that fact That 16%. only was 2009 June in government the trusted who people of share the Ireland In trust. to not crisi the during case the was so and low historically been has Ireland in government Trust39%. in 2009 in peak its at was crisis the when high remained government in TrustIreland. in 40% 56% average on 2007, 2004 between crisis, the Before crisis. the during case the was so and highly government the Interactive Eurobarometer the to According the crisis. people‟sThe factorsSociological the actionsof thegovernment. and reactions influence turn, in who, people the of action the directs it because weight most the has factor ( factors

Ibid. 2011:Glance a Indicators Societyat Social OECD 41 2007, & Greskovits Bohle E u s. Between 2004 Between s. r o

b a e.g. r o

m e protest culture, voter turnout, trust in governm in trust turnout, voter culture, protest t e perceptions and habits have have habits and perceptions r

I n t e r - a

c

- 70% t 2007 40% of people trusted the government in Ireland and 54 % tended tended % 54 and Ireland in government the trusted people of 40% 2007 i v e of the people trusted the government in Estonia, compared to only only to compared Estonia, in government the trusted people the of .

199 .

-

n as te rts clue a be itreit. Between intermediate. been has culture protest the also and –

in 2010 and 2011 only 33% of the people trusted the the trusted people the of 33% only 2011 and 2010 in the the

196 .

55 high

t nt record of strike. of record nt

he people in Estonia have historically trusted historically have Estonia in people he est

expla natory power for for power natory ent). I argue that the sociological the that argue I ent). 198

In Ireland voter turnout has turnout voter Ireland In 197

Voter turnout in the last Voterthe in turnout their reaction cn be can t s

to to - -

CEU eTD Collection 205 204 203 202 201 200 European. average the than more significantly EU. the trusted generally and euro the the of supported adoption people the that fact the by explained be also can reaction public Estonia‟s also is politics in interest and lower significantly significantly lower. in protest of culture the because Ic in as strong be not would reaction the But higher. was turnout voter and protest of culture the and low very was government in trust because Estonia than crisis the to reactions of culture a and poli in interest low a had government, the generallytrusted people becausethe mildest the be would Estonia in people the of reactions that predicts data The government. in trust public a protest, of culture strong a crisis had it the because to reaction strongest the have would Iceland that suggest also would data This earlywhich the indeed stages crisis, occurred. of questions political to comes 2003. in 89% and 84%. was elections OECD among rate strike highest the countries. with country the been has Iceland Historically 486. Iceland‟s and 42 of average 1997

Eurobarometer Eurobarometer 1998 Greskovits S 2011:Glance a Indicators Soceityat Social OECD Ibid. Officefor t a - t i 06 h rt o lbr disputes labor of rate the 2006 s

t i c s 201

I

c National Statistics 2008, 33 2008, Statistics National e

l clnes r as vr activ very also are Icelanders a n S d . t . patience.

a http://www.statice.is/Statistics/Elections/Elections 203 n d

202 a

These numbers show that there is little apathy among Icelanders when it when Icelanders among apathy little is there that show numbers These r d

The voter turnout during the elections in 2009 was 85%, 84% in 2007 in 84% 85%, was 2009 in elections the during turnout voter The

7 6

, 204

2011 . This data would predict that the people would protest during the the during protest would people the that predict would data This .

The data suggests that Ireland would have significantly stronger significantly have would Ireland that suggests data The

.

.

200

was 47, compared to the EU14 advanced economies economies advanced EU14 the to compared 47, was h pol i Iead ae clue f protest. of culture a have Iceland in people The i elections in e .

politically engaged populace and a low level of of level low a and populace engaged politically 56 205

In 2009 trust in the EU in Estonia was 69%, was Estonia in EU the in trust 2009 In h aeae soin rse te EU the trusted Estonian average The -

- h vtr unu drn te last the during turnout voter the overview

eland eland tics CEU eTD Collection 209 208 207 206 I course.likely argue own corporatism thereaction their determined tofollow of the level that were characteristics corporatist lacked who those but them internalize to likely were features Rhodes & Hancke Corporatism of thecrisis. causes external the about discourse dominant the believe Estonians that fact the by explained be might supervision for support weak very the and issue this on position a taking to aversion 16% to opposed sure, not were Estonians of 25% 67%. of average EU the to opposed as this, believed Estonians of 52% Only groups. financial important most the of supervision efficacyof the on EU the in people pessimistic most the emergedas Estonians crisis, the combating in effective most are measures which asked were citizens EU When InIrelandtackle thepercentage the peoplet crisis. of it. with ar actors international that believed people the of 55% only Ireland EU). the and USA IMF, (G8, actors international are crisis the with deal early In actors. international crisis the of causes external the about discourse dominant the challenge to not people the of tendency non than higher 10% was euro the of adoption the supported who people of number the 2009 In EU. the in 48% to compared

Hancke & Rhodes 2005 &Rhodes Hancke Ibid. Eurobarometer Eurobarometer

Onl - y 11% of the people in Estonia believed that domestic actors are most capable to to capable most are actors domestic that believed Estonia in people the of 11%y mainly are crisis the tackle to actors capable most the that believed was it

S F t l a a s n h d 209

a N r

d

. 3

argue E 0 7 B

,

7 2010, 39 2010, 1

,

2009 73% of Estonians believed that the most capable actors to to actors capable most the that believed Estonians of 73% 2009 ht fe er itouto te onre ta hd corporatist had that countries the introduction euro after that 2009

. .

- supporter 57 s.

206

nte pee f aa lo ugss the suggests also data of piece Another hatwas shared belief 20%. that e most capable to deal deal to capable most e of Europeans 207

n otat in contrast, In

. 208

The

CEU eTD Collection 210 increa became it 2000s the in but developmental more was country the 1990s politico different a has Ireland Also, they goal” a have didnot “holy inthe formMaastricht ofthe criteria tostrive towards. and savior their as Union Monetary European the couldn‟tdepict they that meaning hit, crisis already was Ireland different. is Ireland in situation the history, non implemented never has Estonia that fact the with along agenda policy the set goals fiscal concrete its with criteria Maastricht the Estonia in Whereas Historical a initiate not did and it aboutdiscussion the lessonsofthe crisis. creating for responsibility no took shock, external an as crisis part social the ignore to chose countries, both to contrast stark in government, crisis. Estonian The the into investigation an initiated also and one negotiate to efforts made nevertheless but Icelan to contrast in Ireland, In crisis. the of investigation the publicsupporting and 2009 in pact stability the a signing by discourse in actors of number the increased government the Nevertheless, constitution. issues fundamental many on divided is society Icelandic because last not did pact stability social The consensus. through democracy transparent more a build to tried 2009 in office took that government new the Iceland, In the crisis. corresponds corporatism of level The corporatist. highly is Iceland and non a clearly is Estonia that shows crisis. the during governments the of

Visser nership signed before the crisis without any consequences. The government depicted the the depicted government The consequences. any without crisis the before signed nership

2013

institutional .

factors

d, the government did not sign a social partnership agreement, agreement, partnership social a sign not did government the d,

- corporatist country, Ireland is intermediately corporatist corporatist intermediately is Ireland country, corporatist - economi

el Visser‟s Jelle

uh s ebrhp o h E ad h new the and EU the to membership as such 58 c history. During the Celtic Tiger times in the the in times Tiger Celtic the During history. c

210

database - liberal economic policies in its in policies economic liberal Se al 3 Table (See in the euro zone when the the when zone euro the in

to the events during events the to

singly liberal singly in Appendix) in

. CEU eTD Collection short, the dominant discourse was challenged in Iceland by the people, grassroots grassroots people, the by Iceland in challenged was discourse dominant the short, movement grassroots a Party Pirate the of head the and committee investigation the by challenged also was narrative prevalent The democracy. transparent dominant started and crisis the of the causes external the aboutdiscourse challenged government new The down. stepping its in resulted eventually which protests strong with government the challenged who people the first was it Iceland In Enda Kenny. investigationcommittee, Prime andthe Mini theopposition new Shane scholars, Ross, the discourse dominant the challenged actors several Ireland In Neivelt, the Estonian Development Fund and Hansson.Ardo arguments. weak the to and austerity offering only discourse, prevalent the challenge unions trade the did to Nor discourse. dominant alternative viable any propose not did opposition the Estonia In Rational factors (interest groups policies since regaining independence. neoliberal followed that has country ina criteriaperfectsense made sticking Maastricht tothe contra to that conclusion a to come something have wentdidnot inthe 2000s.Estonians wrong a ofcomparisonwithwhich point and 1990s the to 2000s the compare to Ireland in easier was befo features corporatist stronger had had country the because history their in comparison of point a had also Iceland st the contemporary situation. On the contrary the On situation. contemporary the st

Only a few actors attempted to challenge the dominant d dominant the challenge to attempted actors few a Only – re becoming increasingly neo increasingly becoming re

the Citizens‟the M )

ovement –

59 Brigitta Jonsdottir Jonsdottir Brigitta

–

that won 4 seats in the 2009 elections. In elections. 2009 the in seats 4 won that - liberal in the 2000s. This means that it that means This 2000s. the in liberal - the goal of joining the euro the joining of goal the

to talk of the need to build a more a build to need the of talk to

-

Patrick Honohan, trade unions, unions, trade Honohan, Patrick –

who was also a member of member a also was who sore Indrek iscourse: - zone and and zone ster ster CEU eTD Collection 211 a of context the in that is this from follows What people. Icelandic the among reaction actors international by demand The dispute. Icesave the with happened controversy A recovery. their for IMF the as such actors international by praised been also has Iceland IMF.Finally, and ECB the by unfairly the and people the showed, I As discourses. of goal eurothe joining Estonia‟s approved also IMF the and EU The measures. austerity implementing International International factors Sigurgersdottir, Nielsson and Torfason. w scholars Icelandic of because well as case Icelandic actor external by another made was crisis the of lessons the about discussion a for proposition A investigation. while crisis the of causes main The country. to attention pointed economist, Bank World former a Ireland and Acharacteristic common causescrisis. of the als should scholars of role The (name). Minister Prime new the and committee investigation the opposition, the movements,

Danielsson & Zoega 2009,;Thorhallsson 2012; 2012; WadeZoega2009,;Thorhallsson & Danielsson Nielsson& Torfason2012; & Sigurgersdottir 2012

Hansson only made aonly Hansson made actors ifrne ewe tee w css s ht ooa epiil sae ta the that stated explicitly Honohan that is cases two these between difference - zone. In Ireland, the international actors have had a different influence on the differentainfluenceon hadhaveactors IninternationalIreland,the zone. 211 had an influence on the narratives in Estoni in narratives the on influence an had the

–

oetc origin domestic among the countries is the influence of an external actor.Estonia In external an of influence the is countries the among nrk evl. h influ The Neivelt. Indrek ee oetc n pooe a investi an proposed and domestic were mild mild

o be considered because of of because considered be o

referenceto o e opnae fr hi lse cue a nationalistic a caused losses their for compensated be to

f h cii in crisis the of 60 new government thought they had been treated treated been had they thought government new the

appointed as the new Central Bank Central new the as appointed

overheated ence of external actors emerges in the the in emerges actors external of ence rig abroad orking

their argument about the domestic the about argument their a presentation given in a foreign foreign a in given presentation a

economy and did not propose anproposenot did and economy a because they because a ain n h Parliament, the in gation –

ailsn Zoega, Danielsson,

praised it for it praised Governor .

,

CEU eTD Collection 212 In time. over negative Ice more even became people Ireland In 2011. May in 40% to 2009 summer in 16% from up went positively situation the view to tended who people of number s also can you Estonia In did. Estonians than severe more be to crisis the considered Irish the that follows crisis. the before 90% and 2009 in 7% were percentages the Ireland In crisis. the before situatio the view to tended Estonians of 16% 2009 summer In perceived. was crisis the badly how is important more Even length. intermediate of one Estonia and shortest the had has Iceland crisis, longest the experienced te In becomes. reaction negative a probable more the duration, the longer the arguedthat be can it because crisis the of length the is more matter to seems What levels. differentdevelopment at were they because overheated more was country inEstonia. IcelandIreland banks and banks by Swedish in credit rapid was countries these in crises the fro differs self was rates, banks its in exchange problem main the and their devalued, Iceland maintained and bubbles housing experienced Ireland and Estonia I in and 22.5% was Iceland 2010 and 2009 between GDP of 12% to amounting measures austerity introduced Estonia crisis the of severity the Regarding Economic factors international ac the of actions the perceive people the how is thing important the stasis or change discourse

Kattel & Raudla2013 &Kattel land dissatisfaction with the economy was 75% in summer 2011 and satisfaction 16%. In In 16%. satisfaction and 2011 summer in 75% was economy the with dissatisfaction land m the rest because it did not experience a banking crisis. In general, the nature of of nature the general, In crisis. banking a experience not did it because rest the m ee a clear indication that the situation was viewed as getting better because the the because better getting as viewed was situation the that indication clear a ee tors, not their actions tors, nottheir

.

reland 50%. The difference in the nature of the crisis is that while that is crisis the of nature the in difference The 50%. reland

212 h ttl ot f re of cost total The . n in the national economy positively, as opposed to 75% to positively,opposed economynational as the in n per se .

- 61 to GDP growth caused by lending by domestic domestic by lending by caused growth GDP to

rms of high unemployment Ireland has Ireland unemployment high of rms - salsig h bnig etr in sector banking the establishing

- It difficult is to lending, not housing. Estonia Estonia housing. not lending,

evaluate which evaluate which

It CEU eTD Collection 213 beha factors historical as viewed be also can factor sociological the and weight much have not does factor historical The groupsof interest also onsociological depends factors. narrativ prevalent the questioned who actors most the had country corporatist Estonia of country culture corporatist least the the In voice. given because are actors many factor how determines corporatism discursive the on dependent partly is factor rational The the largest effort. made government the Iceland in but discourse public the in actors other include to effort no atstasis In the governmental level. the factor discursiveThe the reactions ofthe populacecrisis. during the abo Statistics public. the among stasis and change discourse explaining in weight most the has factor sociological analysis of levels diffe of power explanatory the evaluating In Summary the and positively fairly Estonians Icelanders fairly badly. the badly, very crisis the perceived Irish the short,

Eu vior of the government and the public during thecrisis.government andthevior of public during the robarometer Interactive robarometer –

there were only a few actors who challenged the dominant discourse. The most most The discourse. dominant the challenged who actors few a only were there

–

ut trust in government, voter turnout and strike rate accurately predict predict accurately rate strike and turnout voter government, in trust ut the level of the government and that of the public. I argue that the the that argue I public. the of that and government the of level the – 213

corporatism .

–

has the most weight in explaining discourse change and and changediscourse explaining weightin most the has

weakest corporatist state Estonia the government made governmentweakest state corporatist Estonia the made rent factors I differentiated between two different two differentiated Ibetween factors rent 62

per se per

because the culture of corporatism of culture the because

-

they predicted the the predicted they e. The amount The e. –

CEU eTD Collection their because factors influence the public perceives onhow depends them. international and economic the of weight the evaluate to hard is It and Ireland In office. Iceland the discours take to going is government which on vote people the eventually so the all, in All ciological e changedafter thee tookoffice.government new atr was factor

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the corporatist corporatist

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