Economists challenge Europe’s austerity
WHEN Spain’s “Indignant Ones” protest movement began eight months ago, it was widely seen as a young people’s initiative, with no coherent ideas, which would soon die out.
Yet while the movement is now less visible on the streets, it is increasingly reverberating in academic circles, where economists are challenging the dominant free-market thinking.
The austerity policies with which European governments are trying to solve the euro crisis are on the wrong track, say Fernando Luengo and Nuria Alonso, two Madrid economy lecturers who helped to launch the Econonuestra initiative.
The platform, which opposes “market fundamentalism” and proposes “a different vision of the economy,” was launched less than two months ago. Yet its manifesto has already been signed by about 1,000 people, including more than 200 academic economists.
An alternative school of economic thought is also emerging in other countries such as France, Italy, Greece or Britain, said Luengo and Alonso, who teach at Madrid’s Complutense and Rey Juan Carlos universities respectively, in an interview.
The Indignant Ones’ protests were sparked partly by Spain’s record unemployment — currently at more than 21 per cent — which brought 80,000 people to the streets all over the country mid-may. The date of May 15 gave the movement the other name it is known under, 15-M.
The first rallies were followed by others, as well as by protest camps at city squares and neighbourhood assemblies debating democratic reforms. The Indignant Ones sparked or encouraged similar movements around the world, and simultaneous rallies were staged in dozens of countries on October 15.
Assemblies and occasional rallies are still being held. The Indignant Ones are also increasingly focusing on problems in the housing sector, with protesters preventing the expulsion of people unable to pay mortgages, and squatters occupying empty buildings. The apparently heterogeneous movement is far from directionless, says Luengo, the likes of whom are trying to give it a more solid theoretical basis.
Academia is dominated by thinkers supportive of the current economic policies, who are funded and backed by the financial and media powers, Luengo and Alonso said.
“But the 15-M has encouraged critical economists to start getting organised,” Luengo says.
Spain, for instance, focuses on trimming its 8 per cent budget deficit with draconian spending cuts, and is economists said. planning a reform to make the labour Increasing numbers of Spaniards, market more flexible, in an attempt for instance, are taking private health to restore investor confidence and to insurance while tens of thousands ward off an eventual Eu-led bailout. have been left without medical care
Such measures ignore the root for not affording to pay social securicauses of the financial crisis, transty fees. Meanwhile, “there is no talk ferring the burden of combating it to at all” about reforming the functionordinary citizens while reinforcing ing of financial markets and about the privileges of the financial powers placing them under stricter controls, whose practices sparked it in the first Luengo notes. place, Luengo and Alonso said. Social inequalities are now higher
Cuts in areas such as health and in Spain than at any time since 1995, education are leaving citizens inaccording to an OECD study. creasingly unprotected, while public Not only do the current policies money is being channelled to banks deepen inequalities, but the austerity which use it to speculate on governalso undermines consumption and ment debt, Luengo says. paralyses Spain’s economy, which is
“Financial markets and some poslipping into a recession, Luengo and litical powers are delivering a straAlonso say. tegic battle” to extend their control A growing number of politicians over society, a situation which is — including German Chancellor leading to the increasing privatisaAngela Merkel — are now admitting tion of social services and “weakthat austerity alone cannot revive Euening the public sphere,” the two ropean economies.