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Explaining The EU’s Politics Of Austerity

Melloni, Nicola, (2015), “Explaining The EU’s Politics Of Austerity”, Social Europe Journal, 17 Αυγούστου

What is the logic behind austerity? The standard explanations given during the last five years do not hold solid ground. Many – including famous economists and central bankers – had supported budgetary cuts to restore market confidence. Markets, however, were hardly impressed: operators care about profits – usually associated with growth – and cuts in the midst of the crisis do nothing to increase market confidence. Austerity was also justified as a tool to guarantee creditors; that, too, seems a non-plausible explanation. In Spain and Italy, interests rate differentials reached their peak while the Rajoy and Monti governments were passing draconian cuts and anti-labour legislations.

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