Welfare spending and the EU: is austerity now a permanent economic adjustment?

The debate over the European Union suffers from one perennial pitfall – views quickly become contentious when the question is posed of whether collaborative efforts to reform individual countries’ relationship with the EU are advisable, or whether a more hard-line stance needs to be taken. Unfortunately, any suggestions for reform themselves can often be ignored as a result in favour of the sensationalism that surrounds the European debate.

For instance, when an observer witnesses the economic turmoil in which Greece finds itself, it is easy (and somewhat understandable) that the Eurosceptic arguments seem to become a very attractive position. In addition to the increasingly fractious Union, which seems today to consist of individual nations who watch each other with a mixture of hope and suspicion – it becomes clear that the rhetoric of Euro-scepticism becomes an increasingly unattractive concept.

The Chancellor of the UK, George Osborne, recently made a speech about the idea of reforming the EU from ‘within’. Again, the content of the reformative ideas has been sidelined in favour of an automatic polarisation between the views of Europhiles and Europhobes.

The key focus of Osborne’s speech centred on how best to allow Europe to compete in the global race, as a Union which bonds together several countries, many of whom are economic powerhouses in the modern Western world.  To help the UK compete, he suggested austerity measures, less borrowing, lower taxes, capping welfare and addressing the immigration debate (which seems to be discussed with vociferous passion from both sides of the argument).

Osborne was not wrong in addressing this issue – the EU only contains 7% of the world’s population, accounts for a quarter of the world’s economy, as well as half of the global expenditure on welfare. Where the Chancellor was wrong, however, was portraying this welfare spending as a hindrance to the economic prosperity, not only of the UK, but that of the entire European Union by extension. He did not lay enough importance on how the health, safety and education of European citizens was of paramount importance, and should be of the highest priority to any European government.

The Chancellor explicitly blamed this welfare spending for the economic barriers that face the EU. What this suggests is that there is hidden economic agenda that Osborne has enacted: austerity is no longer intended to be a temporary solution to the economic turmoil; Europeans now need to reduce their outlook on living standards on a permanent basis.

Is there an explanation for these ideas? It is true that as developing economies emerge on the global stage, their standards of education and living standards rise, the level of innovation in that country increases, and their share in the global economy grows to be far greater than it was before. The next question  that European citizens need to ask each other and their politicians is whether the salaries of working people, living standards and working conditions necessarily have to grow worse. It is entirely possible that they do, but it’s a question that has been neglected in the past, and a debate that is well overdue.

The Chancellor stated: ”Now we have the chance to give the British people a real choice. The biggest economic risk facing Europe doesn’t come from those who want reform and renegotiation, it comes from the failure to reform and renegotiate. It is the status quo that condemns the people of Europe to ongoing economic crisis and continuing decline.”

The tenets of welfare and solidarity are aspects of society of which European countries can be proud – the high standard of education and health for all is something to celebrate. If these values are not balanced alongside the need for less spending, the electorate are going to face the brunt of the drop in disposable income. By promoting people’s ability to live a life with a minimal amount of self-fulfilment, it actually strengthens a country’s place within the global race. Quick-fix solutions should be avoided wherever possible – this is undeniable – but permanent restrictions on citizens’ liberty, like those which Osborne seems to support, may be equally imprudent.

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Categories: Global Political Insight, International politics

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