The euro crisis was incorrectly blamed on
government spending, and the subsequent imposition of cuts and increased
borrowing has resulted in growing national debts and rising
unemployment. Government debts in crisis countries have predictably
soared: the highest ratios of debt to GDP in the third quarter of 2012
were recorded in Greece (153%), Italy (127%), Portugal (120%) and
Ireland (117%).
Under pressure from the European Commission, Europe’s member states
have responded by implementing severe austerity programmes, making harsh
cuts to crucial public services and welfare benefits. The measures
mirror the controversial structural adjustment policies forced onto
developing countries during the 1980s and 1990s, which discredited the
International Monetary Fund (IMF) and World Bank.
The results, like their antecedents in the
South, have punished the poorest the hardest, while the richest
Europeans – including the banking elite that caused the financial crisis
– have emerged unscathed or even richer than before.
Behind the immoral and adverse effects of
unnecessary cuts though lies a much more systematic attempt by the
European Commission and Central Bank (backed by the IMF) to deepen
deregulation of Europe’s economy and privatise public assets. The dark
irony is that an economic crisis that many proclaimed as the ‘death of
neoliberalism’ has instead been used to entrench neoliberalism.
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