FES Perspective: Eurocrisis Inequality Is Growing Again in Europe
MICHAEL DAUDERSTÄDT und CEM KELTEK
The crisis in the Euro area dominates European politics and public debate, its dynamics driven by market panic and scarcely restrained by governments.
Apparently, the only game in town is consolidating state budgets, placating investors and restoring competitiveness. Only in recent weeks has growth as a condition of overcoming the debt crisis come back into play, albeit belatedly and half-heartedly. The actual objectives that have to be achieved in Europe remain largely neglected: higher welfare and social cohesion. The first decade of the euro –1998–2008 – is now often regarded only as a period of underestimated risks and running up debts. Interest rates on government bonds were supposedly too low, wage rises on the periphery were too high and the ECB’s monetary policy was too hard for Germany and too soft for everyone else. The fact that for long periods during this time Germany in particular registered weak growth and high unemployment helped bring it about that the positive side of this decade was readily forgotten and disregarded. During these ten years, thanks to growth on the periphery, inequality in the EU fell significantly, although primarily between member states and to hardly within them.
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