Fiscal Focus

Austerity Is Working!

German chancellor Angela Merkel leaves after a joint press conference with Vice Chancellor Sigmar Gabriel after a meeting of the coalition committee about refugees in Europe, Berlin, Germany, Monday, Sept. 7, 2015. Merkel, reflecting on "a moving, in some parts breathtaking weekend behind us," said Monday that all EU countries could help to accommodate the human tide from the Middle East and Africa. (AP Photo/Michael Sohn)
German chancellor Angela Merkel has been blamed for pushing through austerity. But it seems to be working.
  • Why it matters

    Why it matters

    The author argues that controversial austerity programs are in fact working in Europe, and that the European Union as a whole is better off today than it was a decade ago.

  • Facts

    Facts

    • European Union GDP increased by 20 percent in the last 10 years, while GDP per capita rose by 17 percent.
    • Unemployment remains high in a handful of countries, including Greece and Spain, where it is above 20 percent.
    • With the exception of Greece, government spending increased in all E.U. countries from 2006 to 2014.
  • Audio

    Audio

  • Pdf

The prevailing narrative in the debate over the situation in the European Union is that a relentless austerity program dictated by Berlin and executed by Brussels is economically subjugating the Continent and preventing national governments from helping the poor and the unemployed, and stimulating the economy.

German Economics Minister Sigmar Gabriel is calling for an end to the austerity regime and a “detoxification” of Europe. Sahra Wagenknecht, the parliamentary leader of the Left Party, wants to see an “end to the austerity mandate,” a “social new beginning” for the European Union and a “massive anti-crisis program” funded by the European Central Bank.

But an unbiased look at the database of Eurostat, the E.U. statistics agency, brings figures to light that are completely at odds with the doom and gloom scenarios of politicians, mostly on the left, and with the perceptions of many people.

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