Edited by Adelle Blackett and Anne Trebilcock
Chapter 7: Structural adjustment, economic governance and social policy in a regional context: The case of the Eurozone crisis
AbstractBeginning in the 1980s, structural adjustment programmes (SAPs) were widely used in the developing world as instruments of economic policy. Imposed by the international financial institutions—primarily the International Monetary Fund (IMF)—as a condition of financial support for countries facing high levels of public debt, SAPs quickly became the basis on which to apply policies of deregulation and privatization. Since the onset of the financial crisis of 2008, policies similar to SAPs are now also being applied in the developed world, above all in Europe in response to the risk of sovereign default in several European Union (EU) member states. Economic adjustment programmes (EAPs) have led to wage cuts, decentralization of collective bargaining, and greater selectivity in employment protection and social security. The rigidity of the core EU institutions and practices—notably the single monetary policy adopted by the economic and monetary union (EMU) in the Maastricht Treaty—made the 2008 crisis particularly difficult for the EU to weather. Until this systemic flaw is recognized and addressed, austerity measures are likely to continue to be seen as the appropriate response to a crisis framed in terms of fiscal irresponsibility.
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