Negotiation processes: EU negotiations toward the Greek bailout in the context of the boundaries of the EU legal framework
Abstract: This paper examines the negotiations that took place in the European Union (EU) toward the joint financial program for Greece, also known as "the Greek bailout." The paper analyses what type of negotiation behavior was enacted by various actors involved and the boundaries of the institutional and legal framework in which these negotiations took place. The paper argues that bargaining behavior was expected due to the type of policies discussed and the high politicization of the problem, but that nonetheless problem-solving behavior was prevalent. The actors of the euro zone all wanted to solve the problem in order to prevent damage to the shared euro currency. The framework within which these negotiations took place was not sufficient for the EU to deal with the sovereign defaults of several countries facing financial issues. Subsequently, due to euro zone countries' fears of the spill-over effect, the EU created a new mechanism for future cases: the European Financial Stabilization Mechanism (EFSM) and the European Financial Stability Facility (EFSF) (Sibert 2010a).