The austerity measures brought in to halt the financial decline of countries such as Greece, Spain and Italy have definitely been a gamble for a number of reasons.
Consequences of Austerity
There is, and will be, continuing hardship for many. A consequence of this may be even more civil unrest than there is now, as people fall deeper and deeper into poverty. To quell disquiet, people’s civil liberties may also be reduced. There are cries in Greece that this is already happening, after the recent sacking of TV journalists for criticising the Government.
Governments that implement austerity measures are well aware that their popularity will suffer. Though their countries may benefit in the long term, short term austerity is not a vote winner. It will be interesting to see how many politicians hold their nerve, when austerity measures are obviously going to see them lose power. Greek politicians were reluctant to introduce the austerity measures, because, though they may have cared about their people, they were also worried about their political careers. Even the seemingly impregnable Italian Prime Minister, Silvio Berlusconi, was brought down by his country’s financial crisis.
In the UK, the Tory and Liberal Democrat coalition will become increasingly unpopular because of the cuts they have introduced. There is also a school of thought, among some Labour supporters, that the coalition will be so unpopular by the end of their first term in office that the Conservative Party won’t gain power again for a generation. That may be so, but Labour leader Ed Miliband has also admitted that he favours cuts.
The Poor Suffer Most
As always with austerity measures the poor suffer most. With energy and food prices rapidly increasing, especially in the UK, the austerity measures are already leaving people to make the choice between heating or food. Governments are in a no-win situation, because if they don’t make cuts, their country’s financial woes may get even worse. If they do make cuts, then the result is hardship for many people. No one who loses their job will be comforted by a rich politician or businessman saying that austerity is necessary – even if it means that there’s more likely to be better times five years down the road.
This decade will be the decade of austerity, as the financial gloom is unlikely to fully lift until around 2020. Even if a country is not in a recession anymore, the cuts will continue. With Britain coming out of recession that may just make the Government think that the cuts are working, and that if they are made even deeper, then Britain’s financial situation will improve yet further.
France Focussing on Growth
Because the likes of Greece, Portugal and Ireland have received huge bailouts from the European Union and International Monetary Fund, the EU and IMF are expecting something in return. That something is bringing in austerity measures to help alleviate the financial woes of those countries.
Not all European governments are favouring austerity measures. French President Francois Hollande sees growth as a way out of the world’s financial problems. There are many others who also still argue that austerity will harm growth, because there is less money around to spend.
The most powerful country in the EU, Germany, has not been so badly affection by the world recession, but even she is planning on massive cuts. Spain is teetering on the brink of requiring a bailout, and Italy is not far behind. The next 12 months will probably determine whether the age of austerity has reached its nadir, or whether the worst is yet to come.