The Wrong Kind of Resilience? Political Leeway in the European Consolidation State

The reaction to the crisis in the Eurozone has caused significant transformation in the economic governance and political economy in the Eurozone. The countries which were most affected by the crisis were put under adjustment programmes with more or less extensive policy conditionality, in all cases founded upon austerity principles. This reactive approach to the crisis was complemented by a preventive approach to the crisis which seeks to avoid new sovereign debt crises in the future. With intensified economic surveillance and coordination enshrined in measures such as the European Semester or the Six-Pack, as well as the constitutionalisation of debt brakes pursuant to the Fiscal Compact, a clear emphasis on budget consolidation is now firmly in place in the European Union.

However, given the mixed socio-economic results of the austerity programmes, there is the question whether the "right" kind of resilience against sovereign debt problems is actually the "wrong" kind of resilience that prescribes a path of public spending and economic policy which narrows down political leeway in order to comply with expectations of investors, regardless of possible adverse outcomes for the public at large.

Referring to Streeck's model of the "consolidation state", I will analyse whether the post-crisis governance framework has proven its resilience so far, what (positive and negative) consequences this arrangement can have moving forward and which kind of alternatives appear on the horizon and whether those are politically desirable and/or feasible.