Thursday, May 23, 2013

Stimulus vs. Austerity: the IMF Weighs In...

Here is another contribution to the "austerity vs. stimulus" debate that has characterized not just the US-EU relationship, but also debates within the EU and between the EU Member States and International Financial Institutions like the IMF.  Although IFIs like the IMF initially promoted a course of austerity for countries like Greece, Portugal, Ireland, and Spain, they have since moderated if not fully reversed course on the "harsh" cuts that were imposed on these countries early in the financial crisis.

Has there been any discussion of the ways in which the economic crisis or Europe's economic woes have impacted the work of your respective internship organizations?

Christine Lagarde at the World Economic Forum (photo from the World 
Economic Forum via EU Observer:


  1. In my first week working at the EU Parliament, I haven't heard much discussion on this issue or the impact of the financial crisis on the EU Parliament. However, I imagine that I will in the coming weeks. I also find it interesting that some IFIs, particularly the IMF in this article, have moderated, or completely reversed, their position on "harsh cuts." I don't know much about economics but the IMF's argument makes since to me: that the UK economy will see a larger expansion if the cuts are pushed back a year. There seems to be more emphasis placed on economic growth now than on deficit reduction.

  2. I also have not heard much about the "austerity vs stimulus" debates through my internship but I've only been there three days. As my internship is with secEUR, a group that analyzes EU civil security policy, it will be interesting to see what effect the debates will have on defense and security spending. Oftentimes, financial changes necessitate strategic shifts. I will be going to the EU parliament at least once next week and will pay attention to see if there is any talk about a linkage between security and the IMF and EU economic troubles.

  3. This would be interesting to see how the debate may or may not affect the view point of the MEP that I am interning for, Mr. Peter Stastny from Slovakia, since his main focus is international trade. I recently did some research for his assistant about the Transatlantic Trade and Investment Partnership (TTIP) which seeks to establish free trade between the US and the EU. I have not had the chance to meet MEP Stastny or read any of his previous speeches to know whether austerity has been an issue between Slovakia and any other member states but I will keep this in mind once I start doing more in depth research.

  4. Good comments so far! Make sure to return to this post and add additional comments. I'm curious as to whether the issue does emerge as important to your work (or not -- either would be an important observation!).