It’s been almost a month since we first asked whether you believed the European economic crisis might finally be drawing to a close. The EU Commissioner for the Euro, Olli Rehn, was telling citizens at a townhall-style meeting in Estonia that he saw “green shoots” in the European economy (though he was quick to point out that they were still extremely fragile). Supporters of stringent austerity measures finally seemed vindicated; German Chancellor Angela Merkel was rewarded handsomely in her country’s elections last month and British Prime Minister David Cameron has had an exceedingly good summer (for a sitting Prime Minister in the midst of an economic crisis) on the back of better-than-expected UK growth figures.
And yet, not all is rosy in the garden of green shoots. The IMF has just revised down its global growth forecast for the sixth consecutive time, whilst unemployment in Europe remains at near-record levels and threatens a jobless recovery. Recent reports from Oxfam and the Red Cross argue that the impact of austerity on European society will prove devastating even if the economy begins to recover, whilst others point out that debt-levels in Europe have actually increased under austerity (though they have also increased in the US thanks to its policy of fiscal stimulus, to the extent that the current political deadlock over the debt-ceiling may unwittingly reignite the crisis).
It’s important to note that ‘austerity’ means different things to different people. Many policy-makers, whether of the left or the right, advocate some combination of fiscal consolidation (e.g. cuts and layoffs), structural reforms (e.g. cutting red tape, including making it easier to hire and fire) and investment (e.g. government spending). However, strictly speaking, only fiscal consolidation is really considered ‘austerity’ – and few would suggest it should be pursued in isolation.
There is therefore a great deal of disagreement at both the national and European level over the appropriate mix of budgetary rigour and fiscal easing. At a meeting with citizens in Hungary last week, László Andor, EU Commissioner for Employment, called for greater solidarity within the EU. Indeed, when we spoke to Commissioner Andor last year, he told us clearly that he believed it was “time to reconsider the fiscal consolidation policies as they have been implemented in the last two or three years.”
Last week, Debating Europe published the results of a major new Gallup poll conducted on our behalf. The poll of 6,177 respondents, selected proportionally to the population in each EU member state, found that a majority of Europeans now believe that the austerity policies pursued in Europe since the start of the crisis have failed and there are better alternatives available.
We asked the MEP Hannes Swoboda, leader of the Progressive Alliance of Socialists & Democrats group in the European Parliament, to comment on the results of the poll. He argued that negative public opinion towards austerity is justified and a greater emphasis needs to be placed on investment.
We also asked for a reaction from Monica Frassoni, Co-Chair of the European Greens. She saw the poll results as a powerful stimulus for those campaigning for an end to austerity.
Finally, we asked Martin Callanan, leader of the European Conservatives and Reformists, to give his reaction. Callanan warned against over-simplifying the debate around austerity into a simple choice between “cutting” and “spending”.
I think it’s a much more complicated debate than that. This idea that somehow we face a choice between on the one hand austerity and on the other hand growth, by which people mean more spending, is a false choice. As Angela Merkel has said, austerity means living within your means. The problem in Europe was too much spending and too much borrowing, and we won’t solve those problems by spending and borrowing even more.
The poll is worth reading in some detail as it shows some interesting results (including greater support for austerity in Ireland than Germany, and greater public tolerance for fiscal consolidation in Eastern Europe than Western Europe). However, what it also shows is that the public remains unconvinced by the argument that there are no alternatives to austerity in Europe. Whether policy-makers can turn this scepticism around will depend to a large extent on how durable those “green shoots” really are.
You can see some of the results from the poll in our infographic below (click for a higher-resolution image).