Interview: What Do EU Citizens Think About Austerity?

According to the judgment of many critics, the EU fiscal rules are in urgent need of reform. But what has been the impact of more than a decade of austerity? And what do people in the EU actually think about the debt rules? We talked about this with Sebastian Mang of the New Economics Foundation.




22. DECEMBER 2022



The EU’s debt rules have been suspended for more than two years – in the opinion of many critics, the criteria have not been effective for a long time anyway. In mid-November, the EU Commission made a much-discussed proposal on how the rules could be improved. In a recent edition of our New Economy Short Cuts, we discussed the potential of the proposal with Achim Truger of the German Council of Economic Experts and Bruegel director Jeromin Zettelmeyer.

Regardless of the need for reform, decisions on the EU’s fiscal framework are mostly decided behind closed doors. Thus, the voices of the public are often overheard. But what do EU citizens actually think about austerity? And what impact have austerity measures had on their household incomes and other important indicators, such as investment levels or social spending?

The New Economics Foundation and Finance Watch recently explored answers to this in a study. Among other things, the authors conduct a cross-national survey asking 5,000 citizens from Denmark, France, Germany, Ireland and Italy about their views on austerity measures and the EU’s fiscal framework. The study also examines the impact of austerity on debt levels, household income, investment levels and social spending – and concludes that strict debt rules have made each EU citizen an average of 3,000 euros a year poorer. We spoke to Sebastian Mang, one of the co-authors and Senior Advocacy and Campaigns Officer at the New Economics Foundation, about the background to this figure and the study’s other findings.

We wanted to find out from Sebastian how it is possible that they EU citizens want more investment on the one hand and are concerned about high debt levels on the other. We talk about whether a clear picture of opinion emerges from the survey that could establish a consensus for possible reforms, about the role of narratives, and green industrial policy as a possible ‘silver bullet’ for a reform package that tangibly improves people’s quality of life.

The whole interview



The euro was planned during a period in which economic policy making was driven by a deep belief in market liberalism and the near impossibility of systemic financial crises. This belief has been brought into question since the euro crisis, which showed that panics do happen. New thinking needs to focus on developing mechanisms to protect eurozone countries from such panics and to foster economic convergence between members.