Thursday, 8 May 2014

The Politics of Austerity and Public Policy Reform in the EU - A symposium edited by Dr Stella Ladi (Queen Mary University of London) and Dr Dimitris Tsarouhas (Bilkent University) in Political Studies Review

In the introductory article it is argued that the EU is at a critical juncture that will either trigger further political and economic unity or reinforce the voices that instead call for intergovernmental co-operation in place of formal union.  The spread of market pressure from Ireland, Greece and Portugal to Spain, Italy and Cyprus and also beyond has demonstrated that the sovereign debt crisis needs to be dealt with at the European and not just the national level.  Up to now the “politics of extreme austerity” has been the mainstream recipe promoted to and adopted by member states.  The measures are tougher in those countries where there has been external financial assistance from the EU and the IMF (i.e. Greece, Portugal and Ireland) but the rest of Europe is following suit (e.g. Italy and the UK). 

The politics of austerity has been the main avenue promoted by the ‘Euro Summit’ as a way out of the crisis.  A recipe promoted by the German government and supported by a number of member states in the absence of a consensus on more viable solutions has led to fast and often radical policy and administrative changes in the countries receiving European financial aid. Two observations can be made. The first concerns the EU institutions and the increase in coercive mechanisms and conditionality in the EU’s relationship with bailout countries. Furthermore, never before has the role of an international institution, namely the IMF, been so pronounced in EU politics.  The second observation concerns changes at the member state level where following the austerity rationale has led to a further shrinking of national administrations and of welfare institutions and provisions. Citizens are finding it difficult to accept this new Europe, especially in regions where until recently growth and infrastructure development had been linked to EU structural funds.  The financial crisis has been transformed into a social and political crisis, and extremism is gaining ground.  

It is further argued that the complexity of the crisis has made interdisciplinary research and the exchange of approaches, data and results across the social sciences indispensable.   This symposium is a first attempt in this direction.  For example, Saurugger’s engagement with the Europeanisation literature demonstrates the importance of deepening our understanding of changes at the EU level.  Politics and economics approaches shed light on the winners and losers of the wave of public and social policies reforms in the South of Europe (Jordana, Matsaganis and Leventi).  The effect of austerity policies upon the informal welfare state and thus upon the success of economic stabilisation programmes is eloquently demonstrated by Lyberaki and Tinios, building upon the economics of the family and social networks literature.

To conclude, it is argued that the intensity of the crisis and its theoretical and empirical implications have increased the need for a normative discussion about the future of Europe within academia and between disciplines.  The EU and its member states are at a critical juncture and they should either move forward towards a more federal union or they will be guided to a return to intergovernmentalism.  The solutions and the intermediate steps between the two directions are many and should be further discussed and explored by politicians, citizens and academics.  The upcoming European Parliament elections are the immediate forum for this debate.  What needs to be elucidated in the near future is a coherent vision of the future Union. Further delay in articulating that vision threatens to undermine the EU project in its entirety. 

- Written by Dr Stella Ladi, Senior Lecturer in Public Management at Queen Mary University of London

The Politics of Austerity and Public Policy Reform in the EU is available in the Political Studies Review May, Vol. 12, Issue 2

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