Austria should be the last warning: policy change or implosion

austria

The far-right has been making major electoral progress across Europe for years. The onset of the economic and financial crisis proved the European Union’s institutional design was incapable of answering to economic shocks, becoming unable to compensate the loss of sovereignty of member state, especially in terms of monetary policy. Since countries do not control the currency (and the European Central Bank is committed to price stability only, not growth) and this is not compensated with EU-wide fiscal mechanisms that act as automatic stabilizers, the only way crisis countries could gain access to international financing was to accept bailouts with harsh reform agendas attached. This has been deepening the recession not only in the rescued countries, which have witnessed public spending, wages and employment plunge, but to all EU countries, since the spill-over effect has permeated them due to their economic interdependence.

This has caused two different, but still similar reactions in Europe. On the one hand, rescued countries increasingly see the EU as a synonym of austerity and misery. Greeks do not understand why they have to pay for Nea Democratia’s government lying about public deficit. Spaniards fail to understand why their public debt used to be less than 40% of the GDP in 2007 and it sky-rocketed to 100% after rescuing the financial, being citizens liable for a crisis they did not cause. Therefore, rescued countries tend to emotionally and ideologically detach from the EU, although this has translated into pro-European, progressive changes: Syriza in Greece, the impressive debut of Podemos in Spain, a progressive government in Portugal, and the centre-left still in power in Italy. But the critiques to the EU are clearly on the table. Continua llegint