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41 J. Soc. & Soc. Welfare 33 (2014)
The Bitter Pill: Austerity, Debt, and the Attack on Europe's Welfare States

handle is hein.journals/jrlsasw41 and id is 215 raw text is: The Bitter Pill: Austerity, Debt, and the Attack on Europe's Welfare States Howard Karger University of Queensland, Australia School of Social Work and Human Services There is a general belief among may European policymakers that the current debt problem in some Eurozone countries is caused by the unsustainable levels of governmental spending required to maintain overly generous welfare state programs, a bloated public sector, overly generous pension levels, state subsidies, and low user fees for services. Their proposed solution lies in implementing stringent austerity measures designed to disci- pline debt-ridden governments by cutting public budgets, reduc- ing the number of public sector workers, curbing social benefits, and sharply narrowing the scope of the welfare state. Based on a belief in 'expansionary austerity,' this approach repudiates a key Keynesian principle for dealing with a recession-namely, the use of government spending to pursue full employment. This paper will examine the austerity measures forced upon several heavily indebted European nations by the 'Troika'- the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). Also examined will be the introduction of components of the IMF and World Bank's Structural Adjustment Programs (SAP) into the Euro- zone context, and the resulting social and political instability. Key words: austerity, European Commission, European Central Bank, International Monetary Fund, World Bank, Structural Ad- justment Programs, welfare state, Keynes A tense consensus existed in Western nations around the view that Keynesian economics (and the modem welfare state it spawned) has provided the social and political stabil- ity necessary for economic growth. Even in the U.S., where Keynesianism is relentlessly attacked by conservative econo- mists, policymakers and think tanks, the critique fell by the Journal of Sociology & Social Welfare, June 2014, Volume XLI, Number 2 33

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