Structural Adjustment Comes to Europe




At the end of last week I spent two very enjoyable days at Roskilde University, Denmark discussing the structural adjustment process unfolding across Europe.  The Workshop was convened by the Global Dynamics research group  at Roskilde, and Laura HornLindsay WhitfieldSevasti Chatzopoulou and Helene Dyrhauge in particular.  



Image courtesy of Roskilde University Website.

The workshop involved a programme of excellent papers from scholars from across Europe and beyond:

  • Lindsay Whitfield began the workshop with a reminder of the processes of structural adjustment as they were applied to developing countries throughout the 1980s and 1990s through the agency of the IMF and World Bank, which acted on behalf of the creditors in the public and private sectors.  Lindsay also reminded us however that the politics of structural adjustment moved from the Washington Consensus emphasis on fiscal balance, price stability, macro-stabilisation, privatisation and liberalisation, to one that increasingly takes into account the need to foster a domestic industrial policy that provides employment, higher productivity growth and diversification away from a dependence on primary commodities.
  • Lucia Pradalla provided an insightful analysis of in-work poverty in Italy, Germany and the UK, arguing that the growth of insecure and low-pay employment in Europe is intimately connected to the increasing integration of production in emerging market economies and Europe, as well as migration.
  • Ricardo Molero provided an overview of findings from a large research team comparing adjustment in Latin America and Spain, arguing that one of the main outcomes of adjustment is to cheapen labour power as the ultimate result of a class-based strategy to re-impose profitability.
  • Andy Storey provided a  critique of the anti-democratic measures introduced through European economic crisis in response to the crisis in the Euro-zone.
  • Jose Reis considered the implications of adjustment in the Euro-zone ‘periphery’ in relation to a general ‘submission’ to financial power.
  • Dimitris Pantoulas considered the prospects of Greece echoing shifts in Latin America through neo-liberal adjustment to a post-neo-liberal politics, as for instance in Venezuela.
  • John Smith discussed the globalisation of production in the context of imperialism.
  • Jamie Jordan (a first year PhD student!) produced a critique of methodological nationalism and the much vaunted Varieties of Capitalism approach, in the context of adjustment in Portugal.
  • Henke Jorgenson provided an insight from his experience of delivering structural adjustment programmes and argued for greater consultation and country-level ownership of adjustment.
  • Stuart Shields gave an overview of a series of waves of structural adjustment in Eastern and Central Europe (ECE), and examined the current role of the European Bank for Reconstruction and Development in refining neo-liberal strategies in ECE.
  • Jeffrey Harrod related his (much) earlier research on structural adjustment in developing countries in the 1980s to the process now unfolding in Europe. He identified the role of adjustment in unpicking state and social corporatism and it’s potential to therefore also create legitimacy problems.
  • Frances Stewart  gave a keynote lecture in which she explored the different experiences of developing countries in the 1980s and the late 2000s in the context of world wide economic problems. She then compared this with the current experience of Europe, concluding that Europe needed to learn to protect productive sectors, to ensure social protection and investment in skills and education.

My own paper, written with Paul Beeckmans, explored the response to crisis in Europe.  It argued that this should be seen as a continued project of adjustment of domestic capital and labour to the demands of competitiveness. This project stretches back to at least the early 1990s, and is now embedded in European integration as a permanent and universal feature.

Some common themes emerged in many of the papers.  First, many of the contributors agreed that the incorporation of emerging market economies – particularly, but not only, China and India – is transforming the global political economy and enhancing competitive pressures. Several papers also suggested that this meant that the academic study of the crisis and response, needs to go beyond a methodological nationalism that sees the routes of European problems as based, and soluble, in Europe.  It seemed certain that future work by this group of scholars would see the rejection of methodological nationalism as a baseline requirement.

Second, many saw the current crisis in Europe as a continuation of longer-term underlying crisis pressures that have been evident since the 1970s. Episodic eruptions of these into actual crisis has frequently been used as an opportunity to press for reforms that would not otherwise be successful.  Here Shields’ discussion of ECE was illustrative, as was Storey’s discussion of the disablement of democracy.  Several contributors also emphasised the argument in my paper that structural adjustment is likely to be a continuous feature of European strategies for the foreseeable future, as economies across Europe try to cope with growing competition from emerging economies.

Third, it was widely agreed that the adjustments to the current crisis are eroding democratic provision, leading to downward – if uneven – pressures on wages and the restoration of profitability.

Fourth, there was wide-spread concern that the permanence of adjustment, combined with its social and democratic effects, would lead to declining legitimacy; several papers charted the emergence of protest politics and surveyed evidence of declining confidence in political institutions. These papers therefore lamented the lack of a joined-up, coherent, progressive social challenge to the ‘orthodoxy’ of adjustment, and warned that the most visible ‘response from below’ so far was from the extreme right.

The workshop was enjoyable intellectually, but also culminated in discussions about further future work which might move beyond analysis into a politics of praxis, uniting academics with practitioners, labour and social movement representatives, and other potentially progressive forces.  Watch this space…

In the meantime, thanks to Laura, Lindsay and their colleagues for their wonderful and generous hospitality and very effective facilitation.




One comment

  1. Pingback: New paper on Structural Adjustment in Europe | alexnunnblog

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