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Watson Institute for International and Public Affairs

Giulia Mennilo ─ Sovereignty and Solvency: Just a Material Constraint?

Tuesday, October 28, 2014

4:30 p.m.

McKinney Conference Room

Giulia Mennilo, Institute of Economics, University of St. Gallen, and Visiting Research Fellow, Watson Institute for International Studies

​The politics of ​​financial markets culminates in the assessment of the creditworthiness of sovereign states ─ with striking societal implications.​ ​This paper examines the structural power exerted through the practice of sovereign ratings in the discursive construction of the​ ​solvency of states. I argue that sovereign ratings, understood as an intersubjective practice of power, shape shared understandings, norms​ ​and beliefs about the constitutive parts of a state's creditworthiness. Indirectly prescribing the rules of the game, the practice incorporates​ ​the potential to shape the economic policy agenda and to ascribe to states which role to play in the economy.​

​Driven by the problematization of public ​​finances and debt, sovereign rating events could stylize restrictive fiscal policies as an inevitable​ ​therapy to overcome the crisis, construct public budget consolidation as an unquestioned overarching aim, and decouple the consequences of​ ​the financial crisis from its actual origins|allowing for a redefinition of the financial crisis into a crisis of sovereign debt.

The paper is available here.

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