Dogmatic cuts see eurozone debt pass 92%


The European Union’s neoliberal austerity dogma is adding to public-sector debt across the continent, EU figures revealed today.

Official statistics body Eurostat said government debt in the eurozone had risen to 92.2 per cent of GDP in the first quarter of 2013, up 4 per cent on a year ago, while it rose to 85.9 per cent from 85.2 per cent across the EU as a whole.

Since the 2008 financial crash EU countries such as Germany and Britain have blamed excessive government spending for the economic crisis and prescribed sweeping cuts to jobs, public services and employment rights as a cure.

The Brussels austerity mantra has seen crippling assaults on the public sector across the EU.

These have either been imposed on governments by the EU, European Central Bank and IMF “troika” in return for bailouts, as in Ireland, Greece, Portugal, Spain and Cyprus, or forced through by technocratic bankers’ placemen such as Mario Monti, the unelected former European commissioner who ruled Italy from 2011 until April this year.

But the “medicine” has hobbled growth as workers thrown out of work or denied pay rises in a period of rampant inflation have seen their spending power slashed.

Thousands of businesses have gone bust across southern Europe, putting more people on the dole and shrinking tax revenues – thus increasing government debts rather than tackling them.

The most indebted EU country is Greece, where debt hit 160.5 per cent of GDP. The country is still mired in a six-year recession thanks to Athens’s savage cuts programme.

Critics charge that austerity was never intended to bring down public debt and was instead a vehicle for weakening the public sector and rolling back workers’ rights.

“It has become clear that the so-called commitment to ‘national salvation’ was nothing more than an exercise to imprison the country in right-wing policies,” Portuguese Communist Party leader Jeronimo de Sousa said.

Portugal’s debt has risen to 127.2 per cent of GDP.

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