Domestic Drivers of Austerity: A Rationalist Account of Adjustment Preferences in the Eurozone Periphery

Unemployment, low growth and social polarization: irrefutably, austerity has had widespread negative consequences for the Eurozone periphery. And yet, opposition to austerity remains comparatively weak on an institutional level - even from the deficit states of the monetary union. Why is this so? This paper argues that domestic political conditions help explain why deficit countries have made relatively few attempts to negotiate better agreements with creditor states. Faced with the alternative of external adjustment, there are namely strong domestic interests that favor austerity. In brief, this paper explores how economic vulnerabilities to adjustment outcomes effects the political preferences of interest groups in deficit states. It does so by looking at novel questionnaire data to be fielded from surveys in Ireland, Spain and Greece during late 2016/early 2017.