After Austerity: What's Left of Democracy?

Democracy requires that elected governments enjoy room of maneuvre in important policy fields such as economic and social policy, although within the constraints posed by international regimes. Such room of maneuvre has been curtailed in the wake of the crisis, and – for Eurozone members – severe austerity policies. The paper provides a comparison of Italy, Germany and Switzerland. After over a decade of fiscal restraint and still mounting debt/GDP ratio due to no economic growth, Italy claims to have a room of maneuvre, but does not really have it. Conversely, Germany claims not to have  room of maneuvre, although it would have it and does not use it, sticking to its policy choices as if there were no alternative to restraint of internal demand. Geographically squeezed between Germany and Italy, but outside the EU and the Eurozone, Switzerland avoided the problems facing Germany and Italy, also by institutional domestic means; but it is forced by those same means and the underlying distribution of political power onto a policy path which is similar to that of Germany and Italy. The paper analyzes if and to what extent policy choices are still available. It  highlights how in all three cases rather than being a game-changer, the crisis has accelerated and brought to the fore already existing trends, as the pre-crisis political decisons have been decisive in structuring responses to the crisis, the political consequences of those and the foreseeable fate of democracy after the crisis.