Government officials throughout Europe are trying to find a way to reverse the debt crisis. They have imposed deep budget cuts for a couple of years now. These austerity measures have had serious implications for citizens throughout the continent. Citizens throughout Europe are speaking out against austerity and hope governments will focus on improving economic conditions for the lower and middleclass.
State of the Eurozone Economy
According to Joseph Stiglitz, an economics professor from Columbia University, most of the Eurozone is suffering a deep depression. Policy makers are reluctant to use that word, but the people of Europe know how bad conditions are. Economists believe that the austerity measures are only making matters worse. Stiglitz warns that Europe will need a decade to recover from the damage caused by these budget cuts.
Most economists agree that the Eurozone needs some structural changes. However, they said that policymakers are focusing too heavily on reforms within the individual countries. They said that they are going to need to focus on fixing the framework of the euro itself.
Citizens have thrown austerity strikes over the last year. They are calling for their leaders to stand up to the ECB and the European Commission leaders demanding austerity. Pier Luigi Bersani is pledging to stand by their request. He recently said that Italy must “leave the austerity cage.”
Nevertheless, politicians like Bersani don’t appear to have enough political clout to convince other lawmakers to reverse austerity measures. Austerity will probably remain a reality until enough people support Bersani and other lawmakers who share his views.
Will Austerity Work?
Some experts speculate that the citizens of Europe will refuse to tolerate austerity in the very near future. They may side with Bersani and other leaders who promise to stand up against the budget cuts. Politicians may feel pressured to give into their demands and increase spending.
However, austerity could fail even if leaders don’t back down on their budget cuts. Revenues may continue to shrink in the coming months, which would make it more difficult for individual states to meet their debt obligations.
Some experts have called for alternate solutions, but feel that the government doesn’t want to consider them. Stiglitz said that Germany won’t even consider any of the sound ideas that many economists have proposed. He said that Germany seems adamant about protecting the sanctity of the single currency, even though Europe is struggling to survive. Mario Draghi, the president of the European Central Bank, agrees with his sentiments. The Guardian recently quoted Draghi stating that the ECB will do whatever it takes to save the euro.