Scientific analysis of two oppositional

articles regarding the bailout of Greece

Introduction
Over

the

last

years

the

Greek

government developed a huge debt

problem which exploded in the beginning of 2010 and the state was about to become
bankrupt. This situation led to a discussion whether to support Greece or not. Since Greece is
a member of the European Union as well as the European currency union, the EU decided to
establish a financial bailout in order to assure the stability of the Euro, as well as to avoid a
collapse of the EU as a whole.
This paper will introduce two texts, which have oppositional views regarding the support for
Greece. Its purpose is to analyse these in depth with respect to their scientific plausibility on
the basis of the theories presented in the book Reflections on academic discourse in business
and economics by Muysken, Gijselaers, Hommes and Pauwels.
The first text that will be analysed is called: Five reasons not to support a bailout of Greece
which is written by S. McNamara and J.D. Foster, Ph.D, representing the opinion against the
support for Greece. As a response to this, Jay T. Chittooran and Carlos E. Aramayo published
One reason to support the Greek bailout as the oppositional point of view. At the end, this
paper will summarize the findings from the analysed texts and will compare them shortly.
Five reasons not to support a bailout of Greece
Five reasons not to support a bailout of Greece is published as a Web Memo by the Heritage
Foundation which enjoys great political influence in the United States. The institution
represents strong conservative views including the general refusal of governmental
interaction.
First of all the text can be divided up into seven paragraphs beginning with a short
introduction of the topic, followed by their five reasons and ends with a short conclusion.
In the beginning of the article, the authors describe the austerity package the EU put on the
Greek government in order to reduce the depts. They begin with mentioning the result of
these regulations, using the empirical method that people in Athens are violently
demonstrating and that already three people died as a consequence.
Showing quantitative data like a dept-to-GDP ratio of 120 per cent, illustrates the situation of
Greece more explicitly. Moreover the authors want to emphasize how devastating the
situation for Greece is. The last sentence of the first paragraph indicates that the authors have
a pre-modern view since they say that a bailout would simply not be the right answer.
In the first reason A Bailout Will Not Work, S. McNamara and J.D. Foster use inductive
reasoning by observing the reforms in Great Britain and New Zealand in the 1980s and 1984
followed by the thesis that the Greek government has to implement reforms as root-and2

branch (McNamara & Foster, 2010) as these. They precede their argument by explaining that
the Greek economy is controlled by trade unions and it is thereby difficult to implement the
needed reforms. The authors state that previous Greek governments failed to implement such
reforms and overgeneralize from this fact that the current one will fail either.
In the second reason which is called A Bailout Is Illegal Under EU Treaty Law the authors
quote the article 125.1 of the Treaty on the Functioning of the European Union which states
that no country can be forced to give financial guarantees for a specific project. Since the
authors are speaking out their realm of expertise in the case of EU treaty laws, they bring up
four German professors as authorities who support their interpretation of this law and who
would be willing to fight against it in court. To further legitimate their argumentation, the
authors refer to Lord Lamont, the former Secretary of the Treasury of Britain, who says that
responsible members of the Eurozone would not have to subsidize irresponsible ones
(McNamara & Foster, 2010).
McNamara and Foster demonstrate in their third reason A Bailout Is Unpopular a survey
which has been conducted to German voters that the vast majority (70 per cent) is against a
bailout of financially troubled countries. Since Germany represent the largest part of the
contribution to the bailout, the authors reason that the bailout is unpopular in general. By
doing so, they overgeneralize the outcome of the poll to be representative for the whole
European citizens. Considering the poll was conducted before the actual problem with Greece
occurred is an indication for the fact its outcome is refutable, meaning that it could differ over
time. Besides that, the authors make use of selective observation because they only show one
survey supporting their opinion while neglecting other polls which could lead to contradicting
outcomes.
Reason four A Bailout Will Not Stop the Contagion deals with the assumption that a single
bailout for Greece will not stop the financial problem Europe faces. The authors are trying to
contradict the statement of the German chancellor Angela Merkel, who is one of the most
important authorities supporting the Greek bailout who argues that the future of Europe ()
is at stake (McNamara & Foster, 2010). Reasoning logically, the authors illustrate that Greece
is not the only member of the EU which has to deal with financial troubles since other
countries from the Mediterranean area face similar problems. Hence, a Greece bailout would
even weaken the position of the other troubled countries on the financial markets. This in
return would accelerate the instability of the European Union.
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The final reason U.S. Taxpayers Should Not Prop Up Profligate European spending shows
the authors opportunistic view against the support in the United States for the fragile banks,
indicating their general refusal against bailouts. The authors argue with nomothetic reasoning
that It was bad enough when the federal government bailed out AIG, () many of the mega
banks, and then GM and Chrysler (McNamara & Foster, 2010). They reveal that if a bailout
did not work for the mentioned companies, it is not going to work for a state either. Again, the
authors have a selective observation because they only present bailouts of the past which have
not worked to their opinion; there might be several different cases where bailouts were
successful. By trying to link the bailouts in the United States to the planned one for Greece, is
overgeneralization since it is not scientifically proven that there exists a relation between
these different bailouts.
In the concluding paragraph Closing Time at Club Med., the authors mention Frank- Walter
Steinmeier, who refused the support for the Greek government. As the leader of Germanys
main opposition party he is an important authority. They note that Steinmeier is convinced of
the fact that the money transferred to Greece is unlikely to be the last transfer of taxpayers
money from Germany to Club Med. (McNamara & Foster, 2010).
Recapitulating, the argumentation of the article can be described as coherent. McNamara and
Foster formulate clear reasons for their thesis and underline these with the use of different
scientific methods. Considering the empirical cycle of Gravetter and Forzano, McNamara and
Foster argue that due to previous bailouts they observed in the past, like the support of the
U.S. banks, they come to the hypothesis that bailouts should be avoided in general. The next
step of the empirical cycle, the prediction transfers their hypothesis to the case of Greece,
declaring that they should not be supported by the European Union.
One Reason to Support the Greek Bailout
The text One Reason to Support the Greek Bailout by Jay T. Chittooran and Carlos E.
Aramayo is a response to the previous article Five Reasons Not to Support a Bailout of
Greece, which can be split up into seven paragraphs. Both authors work for the Streit Council
which is an institution supporting the integration among democracies with a special regard to
the transatlantic partnership.
In the beginning of the text, the authors shortly mention the article by McNamara and Foster
and show a modern view by accepting their argumentation as valid in their own regard
4

(Chittooran & Aramayo, 2010) but state that the first article forgot about the primary reason
for a Greek bailout, avoiding global economic catastrophe(Chittooran & Aramayo, 2010) .
The second paragraph starts with the use overgeneralization that through the reforms
implemented by Greece, the whole European Union finds its way towards a healthy
economic future. By drawing this general hypothesis from a single observation, the authors
also make use of induction. Describing the supporting actions the EU and the International
Monetary Fund (IMF), as an absolute expert about financial issues, have taken into account,
authorities are mentioned to strengthen the authors argumentation.
Chittooran and Aramayo start their reasoning in the third paragraph by mentioning that
already further EU member countries have established various austerity measures to reduce
their deficits. This argument becomes more valid by using the authority of the French
president Sarkozy as well as the effect that other administrations like the Italian, Irish or
Spanish have all followed and announced austerity measures for their own countries.
The fourth paragraph reveals that the Greek bailout would not be unpopular as mentioned in
the text Five Reasons Not to Support A Bailout of Greece. Chittooran and Aramayos
argument is based on several polls which indicate that citizens of fiscally susceptible countries
would be willing to support a Greek bailout. This is a refutable hypothesis due to the fact that
the outcome of these polls may vary over time and could not be current anymore.
Furthermore, the authors use inductive reasoning by referring to historical observations they
made which lead to the thesis that sometimes the bailout is the lesser of two evils
(Chittooran & Aramayo, 2010). The authors continue their argumentation using rationalism
with their premise statement that a collapse of Greece could cause a separation of the EU and
thus an economic downturn. The argument here is that a failure of the EU would have sent a
geopolitical ripple across the globe (Chittooran & Aramayo, 2010).
In the following paragraph, Chittooran and Aramayo illustrate the involvement of the United
States through their active participation in the IMF, hence another important authority is
granted. The participation of the USA is explained by the authors through the logical
reasoning that the USA is itself profiting from a stable Europe because it will promote
increased trade and investment (Chittooran & Aramayo, 2010).
The last two paragraphs show that the authors are influenced by their traditional background
assuming that citizens of the EU have yet benefited from their monetary union without their
5

sovereignty suffering. This presented knowledge is derived from agreement since the authors
neither mention a logical explanation for it nor did they experience it through surveys.
This is the same case for the statement: it is obvious that missteps have been made by the
EU (Chittooran & Aramayo,2010)

where the authors are lacking with a scientific

explanation, making the essence of this information questionable.

In summary, the article continuously shows its emphasis on a modern perspective as
illustrated in the first paragraph and again in the fourth by saying that While the bailout plan
is certainly not the panacea (). By doing so, the authors underline their conviction towards
their own opinion but at the same time seeing the oppositional view also as legitimate. This
text can also be seen as coherent since the information provided is constantly affirmed by
rational reasoning as seen for example in the fourth paragraph. Reaching the end of the text,
the authors tend to use increasingly knowledge they got from agreement to validate their
information as true which is biased by their own opinions and background. Considering the
empirical cycle of Gravetter and Forzano, Chittooran and Aramayo start with observing that
bailouts used to work in the past and thus form the hypothesis that bailouts might work in
general. This is followed by the prediction that a bailout would be the better solution in the
case of Greece.
Conclusion
The analysed texts both make use of several scientific approaches to justify their
argumentation. The authors used a lot of authorities with great political influence and
practiced logical reasoning throughout their work. The application of traditional knowledge
was also common in these articles. The authors of the two texts both followed the first steps
of the empirical cycle but they were not able to go further by testing their hypotheses in
reality since the results of the bailout were not obvious to that time.
The main difference between the two articles is their view of reality because the first text
follows a pre-modern view whereas the other text continuously emphasizes its modern view.

References
Chittooran, J.T., Aramayo, C. E. (2010). One Reason to Support the Greek Bailout: A
Response to

Five Reasons Not to Support a Bailout of Greece. Retrieved January

20, 2011, from:

http://www.scribd.com/doc/32394120/One-Reason-to-Support-

the-Greek-Bailout-A- Response-to-Heritage-Foundation-s-%E2%80%9CFiveReasons-Not-to-Support-a- Bailout-of-Greece%E2%80%9D

McNamara, S., Foster, J.D. Ph.D (2010). Five Reasons Not to Support a Bailout of Greece.
Retrieved

January

20,

2011,

from:

http://www.heritage.org/Research/Reports/2010/05/Five-Reasons-Not-to-Support-aBailout-of-Greece

Muysken, J., Gijselaers, W., Hommes, J., & Pauwels, P. (2010). Reflections on academic
discourse in business and economics. Maastricht: Wadsworth Cengage Learning.