The European parliament has heard some of the authors and executors of Europe’s austerity policy. This is a very good idea, since it was based on thin empirical and weak theoretical grounds from the very start. The idea is refuted by the IS/LM model, which is taught to all undergraduates. I provide some links so that you can inform yourself on the Q&A of Commissioner Rehn, EU bail out fund chief Regling and former ECB president Trichet. This is very insightful and will surely go on the historical record. Congratulations for the European government for demanding an account of what happened from those who have been in charge. And please do not forget while reading the interviews: none of the people interviewed were democratically elected. While it is clear for Regling, a bureaucrat, and Trichet, another bureaucrat, it might not be so clear for non-Europeans that the EU commission. Wikipedia provides some useful information on how this works:
The President of the Commission is first proposed by the European Council taking into account the latest Parliamentary elections; that candidate can then be elected by the European Parliament or not. […] Following the election of the President, and the appointment of the High Representative by the European Council, each Commissioner is nominated by their member state (except for those states who provided the President and High Representative) in consultation with the Commission President, although he holds little practical power to force a change in candidate.
So, European austerity was imposed by non-democratically elected people. It was not based on accepted economic theory, and it was not ‘automatic’, as they now claim. There is nothing in the European legal texts that said austerity must happen. Instead, the rules were changed quite a lot during the crisis. These choices were discretionary. Yes, these were challenging times, but if you are in a position which makes you part of to the political elite of Europe and you’re not up to it – then why did you get into this position in the first place? If you are afraid of hard choices (and that does not include imposing hardship on millions of Europeans), then don’t become a member of the political elite.
It seems to me that the lesson here is quite clear. We need more democracy. With this we would get more accountability and then elections in Greece or Spain would make sense again. Right now, their governments have both their hands tied behind their backs. The one thing that voters want right now – prosperity – they can not deliver. Every government has been ousted in Greece and Spain since 2007’s subprime crisis. Frustration and anger is growing at the political system, and that is quite understandable. It is time to move ahead and return the sovereignty to the people – either nationally, or European.