It is well known that EU is passing through rough crisis. From all sides you can see red lights, and hear alarms. What can be done?! Austerity is being used, but it can be find as controversial measure if it is observed from different angles, ex. government and populists, or if we try to define austerity, there can be used a wide array of choice, like:

“Austerity measures refer to official actions taken by the government, during a period of adverse economic conditions, to reduce its budget deficit using a combination of spending cuts or tax rises.” (http://lexicon.ft.com/Term?term=austerity-measure)

„Austerity, forced from the EU level and supported by national governments, cuts are being imposed in nearly every sector that matters to ordinary people. They are cutting welfare benefits, health care, education; privatising our common goods in the name of paying off the debt, dismantling labour and social rights in the name of making our corporations more competitive so our economy can recover.“  (http://foraeuropeanspring.org)

Through the debate, leaded by Ivan and Miguel, we can find out, from one side, Ivan’s affirmative side, that enforcing contract which one side signed is important in order to keep the relevance of the contract itself. Ivan is briefly introducing us with austerity measures, caused by breaking rules of Basic Treaties (founding documents of the EU), whose idea was equal rules of game for all members. Although, if we read opposition’s arguments, Miguel is questioning, how much austerity is adequate. Nevertheless, it is being followed by riots, leading to social unrest and violation of human rights, causing deterioration of democracy.

Of course here we have clash of opinions. While Ivan is defending austerity measures, believing that they correct bad, unsustainable economic policies. On other hand Miguel is against austerity measures, because they, as Miguel says, are just cover for powerful, self-interested people, making situations just worse than it was, convincing citizens that austerity is a way to new economic growth.

It is up to you now; your opinions, your ideas, your critics, they are all more than welcome. Read, think, and decide between your own clash of opinions, where are we going, and where do you want to go. It is the same with the outcome of debate. Who had better and stronger arguments? It’s up to you to decide. Stay active!

Affirmative speaker: Ivan Bielik (Speaker of IPWG)

Opposition speaker: Miguel Gallardo Albajar (Project director of AEGEE-Europe)

Sabiha Kapetanovic, Moderator of the debate.

Defending the motion

Ivan Bielik, AEGEE-Brno and Speaker of IPWG, student of European studies at Masaryk University, Czech Republic.

I do not believe that Europe should abandon its austerity only because people do not like it. The word of “austerity” has already gained negative connotation in European public space. From this standpoint it is quite courageous to defend such measures. In my part I will explain the correcting nature of austerity measures and the importance of enforcing values incorporated in the founding Treaties.

So, firstly, countries targeted by austerity measures do need the incentive to reform their spending. Deficit-run budgets in countries like Greece or Spain could not be sustained at any price. Such economic policies were hazardous for the citizens from long-term point of view. Moreover, such irresponsibility of politicians who run states was blatant. They were not caring about the prospect of the country, but only for their self-interest. Such approach is doomed for Armageddon. These austerity measures are just correcting the situation which was destined to end very badly. Even at the expense of people’s unrest, it is necessary to redefine and correct economic standards in the countries.

Very interesting example is, paradoxically, Germany. In 1990’s Germany was a “sick man of Europe” – country with no growth, no prospect of development or potential. They embrace exactly the same austerity, because they need to change how economic policies worked. Now they have become most economically developed country in the EU. It does not imply from this example that Greece will be next Germany. What, however, does imply from the example is that correcting past wrongs can lead to better future. In the end, do not forget why such measures are taken. It is not because of sadomasochistic attitude of Germany to enslave Europe, but because national politicians failed. If they had not failed, no austerity would have been implemented. Simple. Therefore, I consider austerity measures as needed to force changes for which national politicians lost courage.

Second point contains value-based argument about keeping the promises which you were signed in the past. The purpose of Basic Treaties (founding documents of the EU) is to set equal “rule of the game” for every member. The Treaties introduce values and norm of the EU. Most of us agree that one should follow these values and norms while he is in. The norms for economic performance of the states are included in the Treaties, so they are applicable for every member state. Nowadays, Spain, Portugal and others break these rules. Austerity measures in the EU are a response for breaking fundamental principles in the Treaties. From this follows that it is not morally wrong to enforce the norms that were agreed by all. If we are not enforcing compliance with the EU norms then there is a precedential decision which can lead to respecting other breaking of Treaties as well. Just consider when other principle of the EU is at stake. Most of the people would argue that it is fair to keep promises. But why then is it bad to enforce austerity when country signed the Treaties? Should not we enforce the norms as well in this case? That challenge is rarely put forward by mass media and even more rarely thought at public. Once you are a contract side, you need to bare consequences of not fulfilling the norms. Therefore, I believe that austerity is justifiable as long as it forces others to comply with the Treaties.

Against the motion

Miguel Gallardo Albajar, Project director of AEGEE-Europe.

The ‘troika’ (the European Central Bank, the European Commission, and the International Monetary Fund) should abandon the thesis that the solution to the current crisis should be based upon austerity. During the last years, they have been imposing this idea against very solid arguments, like the evidence of its adverse effects on the countries that the measures were supposed to save. We all have been witness on how austerity has failed to solve the problems of the countries severely affected by the current financial crisis, with the sole exception of Ireland which had very specific conditions. Austerity has failed to reactivate economy, but it has caused additional problems for middle classes by cutting basic services as education, health care and other social benefits. Moreover, it has been used in many cases as an alibi for enforcing a neoliberal (or maybe we should say ‘neocon’) agenda, including privatization of basic services such as health, air control and water, in many cases sold at very low price due to the urgency of obtaining cash flow, or under suspicion of benefiting some private interests.

The whole austerity idea is quite new, as for previous crises different kind of solutions were taken. It mainly relies on a scientific publication from the National Bureau of Economical Research in Harvard, called “Growth in a time of debt”, issued in 2010. It has been mentioned by US government, by EU commissioner Olli Rehn, or the president of the European Central Bank, when recommending (or imposing) austerity measures to bring back the economic growth.

What nobody could expect is that a young PhD student would prove that the excel sheet from where the article extracts the conclusions is full of mistakes. This shocking discovery has been backed up by the tutors of the 28 years old student, which were skeptics at the beginning but later acknowledged that he was right. What worries me is that nobody checked the calculations before taking dramatic measures that have worsened unemployment, impoverished the whole society of many countries and maybe even jeopardised the growth they were supposed to stimulate.

Many economists start to admit their lack of critical analysis, and politicians have changed their attitude in the last weeks, loosening the strict conditions imposed to countries that had been bailed out. The authors admit partially their mistake, but also signal the politicians which in occasions have cited their research to justify measures that could not be based upon their conclusions. Politicians now try to avoid their responsibility by blaming researchers for their wrong decisions.

In any case, what has been proven is that austerity is not the magic solution to reactivate economies. A rationalization of the budgets is for sure necessary (investment in research and education in the line of the Europe 2020 Strategy should be kept), but Europe has to stop the destruction of decades of achievements in social welfare, which have shaped the society of our continent. This wrong direction, sustained even against evidence by blindly following a research article, is one of the causes of the erosion of the image of Europe on the eyes of its citizens, and it will need years of right policies to gain the trust back. We cannot wait until tomorrow for this change to start.