Paper presented at the Conference “New economic concepts in the current European crises“.
Abstract: This paper argues that the way the Eurozone crisis was discursively constructed led to a large scale entrenchment of European welfare states. How the crisis was constructed did not reflect its actual causes but mirrored the domestic interests of certain political and economic elites in European countries, especially Germany. Therefore, the political and medial discourse that emerged portrayed the crisis as one of “lazy” Southern Europeans now punished for their “profligate” lives. I call this discourse the “PIIGS stories”. In a second step, the spectre of public debt and the “PIIGS” experience (especially the Greek catastrophe) urged governments to pursue, but also enabled them to justify, “fiscally sound” policies and structural adjustments resulting in Europe’s “new austerity paradigm”. In order to prevent a Greek tragedy, the only crisis solution was for states to cut back public spending. These developments have important implications for the European project. First, through constituting political subjectivities in the “PIIGS stories” – “them” and “us” (North and South) – resistance against austerity measures and structural adjustments was delegitimised. Second, the drive towards austerity led to a scaling back of state expenditures and, thus, to a further retrenchment of European welfare states. The paper concludes that without addressing the actual causes of the crisis as part of its solution the Eurozone crisis will continue and even intensify.