1. The political economy of austerity
Although austerity is presented as a necessary economic remedy, an inevitable response to the global financial crisis and recession, and specifically the fiscal and economic crises of countries in the Euro zone, this is demonstrably untrue: austerity policies are promoted even without the context of recessions or currency crisis, and austerity is not the only, or best, option to choose in response to a crisis. Even before the crisis, the IMF, OECD, EU and national governments had been arguing that a continuous reduction in public spending up to the year 2030 is necessary, partly because ageing populations lead to higher spending on healthcare and pensions. Austerity policies have been a central feature of IMF “structural adjustment" programmes since the 1970s, with cuts in public spending and employment required of many countries in that time, and are used by states outside the Euro zone, for example the UK, and also many developing countries, especially those subject to IMF programmes (Ortiz and Cummins 2015).
