Is anti-austerity pro-growth?

Friday 5 October, 6.00pm until 7.30pm, Hellenic American Union, Massalias 22, 10680, Athens, Greece

In France, Hollande came to power on the back of promises to finish “these destructive austerity measures”, spend more on teachers and the state, to push for growth. Now the man who said “[a]usterity can no longer be inevitable” is facing demands from his financial auditors to cut €43bn from France’s budget. With France’s GDP predicted to grow only 0.4 percent this year, it might seem inevitable that something is going to be cut. In Greece, Syriza’s Alexis Tsipras shot from 4 to 27 percent in the polls by promising an end to the bailout agreements forcing deeper and deeper austerity, arguing instead for solidarity and growth. Even the coalition government of the three pro-bailout parties won the election by promising a renegotiation of the austerity packages: a promise soon forgotten.

The calls for growth and the realisations that deficit cutting alone leads to a vicious downwards economic spiral have been widespread this year. Is what can appear to be a rejection of the idea that There Is No Alternative to austerity something to cheer or does it risk making Growth Is The Alternative an empty and cynically populist slogan?

Across the eurozone unemployment stands at a record 11.1 percent. Manufacturing activity across Europe continues to contract. This is the harsh reality of economic life today and it demands serious solutions. Yet some of the political alternatives can seem more like denials of this reality than evidence of any determination to face up to them. Faced with €4.4bn cuts to make in Holland, Gert Wilders chose to bring down the Dutch government rather than take responsibility for any unpopular decisions. Similar arguments could be made about political parties across Europe today. Is saying no to austerity a serious and credible position or just playing voters who, in many cases, have nothing to lose?

And, when it comes to growth, where Hollande argues we must focus, how seriously can this commitment be taken when, in the same breath, he promises to halve France’s nuclear power capacity by 2025? Are the French to follow the advice of Syriza and learn to live on less energy, as “ecologically responsible people”? Politicians of all stripes preach sustainable development and it is routine to hear growth described as a treadmill. If the conditions for growth are to be restored in Europe don’t we have to face up to certain harsh realities? That, for example, the role of the public sector – both in terms of welfare payments and state employment – might actually be too large compared to the private sector? That the private sector is too cautious and risk-averse and prefers to dress in the language of corporate social responsibility rather than admitting profit is the only bottom line? Is it honest to oppose austerity in the name of growth when growth relies, at least in nature, on cutting away the dead wood? That sometimes we might need to let banks fail and even countries default rather than trying to keep the dead afloat? Where are the real alternatives for European countries today?

Gregory Farmakis
entrepreneur; CEO, Agilis SA

Rob Lyons
science and technology director, Academy of Ideas; convenor, IoI Economy Forum

Paschos Mandravelis
columnist, Kathimerini; former editor-in-chief, Newsweek (Greek edition)

Geoff Kidder
director, membership and events, Academy of Ideas; convenor, IoI Book Club; IoI’s resident expert in all sporting matters

Produced by
Angus Kennedy convenor, The Academy; author, Being Cultured: in defence of discrimination
Dr Nikos Sotirakopoulos lecturer in sociology, University of Loughborough; author, The Rise of Lifestyle Activism: From New Left to Occupy
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