Austerity: here to stay?

Sunday 21 October, 10.30am until 12.00pm, Conservatory

The election of François Hollande as president of France at the same time as the Greek elections in May acted as a rallying call for many eager to reject the politics and economics of austerity, to which Europeans have been long told there is no alternative. Almost overnight ‘growth’, rather than austerity, seemed to be on everyone lips. Plan A for Austerity was ripped up, and Plan B was on. Although the subsequent elections in Greece returned a coalition headed by the pro-bailout New Democracy party, the anti-austerity Syriza seemed to gain the moral victory.

European burdens of debt, massive levels of youth unemployment, uncompetitive exports and low growth are real and demand stern and serious, grown-up answers. Should we be posing the question though in terms of either austerity or growth? Hard labour or holidays? Maybe it needs to get worse before it gets better. Austerity now, growth tomorrow? When William Hague said something so seemingly uncontentious and commonsense as ‘there’s only one growth strategy – hard work’, he roused little more than a chorus of businessmen protesting they were already flat out and the government should be doing more to help. But maybe we need to create the conditions for growth by working harder now, cutting out dead wood, being unsentimental about clapped-out industries? After all, real growth means more than just more government spending. It means producing more goods that can be sold at a profit. It means raising productivity through investment in technology, energy and infrastructure. It also often means a wrenching dislocation, even the end of the line, for workers made surplus to requirements. Have we the stomach for that?

Many of the rejections of austerity across Europe today seem to have something of a ‘stop-the-world-I-want-to-get-off’ character to them. A saying ‘no’ loudly more than saying ‘yes’ to something. After all, just what and where is Plan B? Dreams of sequestering Apple’s coffers to save the world aside, it is notable that Germany and France are committed to ridding themselves of nuclear power at a time when more cheap energy is just the kind of thing that could boost the economy. Hollande arrived at the Elyseés Palace in a sober part-electric car promising a ‘scrupulous sobriety of behaviour’, more teachers and higher taxes. Is that enough? Is it right to say that debt reduction should go hand in hand with economic growth? Is it irresponsible or just ambitious to argue that we should worry about growth first and (relatively smaller) debts later?

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Dan Atkinson
economics editor, Mail on Sunday; co-author, Going South: why Britain will have a third world economy by 2014

Daniel Ben-Ami
journalist and author, Ferraris for All: in defence of economic progress and Cowardly Capitalism

Philippe Legrain
visiting senior fellow, LSE’s European Institute; author, Immigrants: your country needs them and European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right

David Smith
economics editor, The Sunday Times; author, The Age of Instability

Para Mullan
senior project manager, Chartered Institute of Personnel and Development; FCIPD

Produced by
Angus Kennedy convenor, The Academy; author, Being Cultured: in defence of discrimination
Para Mullan senior project manager, Chartered Institute of Personnel and Development; FCIPD
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