Description: 'The real cynics are the ones who tell you everything’s gonna be all right' - A blog by Giuseppe Bertoncello
For more than four years eurozone countries – prodded by Germany, the European Central Bank and the EU bureaucracy in Brussels – have stuck to the twin ‘cures’ of austerity and structural reform as their response to the havoc caused by the 2008 global financial crisis.
Austerity was meant to curtail excessive deficits, reduce public debts and restore confidence, thereby bringing depressed ‘animal spirits’ back to life. Structural reforms, meanwhile, were seen as crucial to improve efficiency – especially by cutting back on ‘bloated’ public sectors and welfare programs – and spur much-needed productivity gains in our increasingly competitive ‘flat’ world.
Persuasively promoted by economists, international organizations and the mainstream media as the panacea, austerity and structural reform have been actively pursued by governments. Four years on, the effects are too painful to ignore.