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72-470: After a very short period of existence, lasting a little over three months, the alliance was legally dissolved on the background of the disastrous results in the legislative elections , as it was not a political, but only an electoral alliance. In July 2012, former independent Prime Minister Mihai Răzvan Ungureanu formed the Centre-right Civic Initiative (ICCD). He said that he support

144-460: A forced labor system creating a "corporate paradise" in occupied Haiti. Another historical example of contemporary austerity is Fascist Italy during a liberal period of the economy from 1922 to 1925. The fascist government utilized austerity policies to prevent the democratization of Italy following World War I , with Luigi Einaudi , Maffeo Pantaleoni , Umberto Ricci and Alberto de' Stefani leading this movement. Austerity measures used by

216-462: A political independent technocrat as the new prime minister . Consequently, the former Foreign Intelligence Service (SIE) Director Mihai Răzvan Ungureanu was appointed acting prime minister on 9 February 2012. The government announced the intention to hold parliamentary and local elections at the same time, by lengthening the term of the local elected officials (i.e. Mayors, Local Councils, County Councils, and County Councils Presidents). It

288-586: A complaint regarding the distribution of food and the organization of an electoral spectacle before the electioneering. According to the Emergency Ordinance issued on 6 November by Ponta Cabinet , offering food, drink and money in the campaign is illegal. On 11 November, an old man from the commune of Mătăsari ( Gorj County ) had a heart attack shortly after a discussion in contradictory with PDL deputy Constantin Severus Militaru. PDL deputy said that

360-707: A country uses the currency of an independent central bank that is legally restricted from buying government debt, for example in the Eurozone . In such a situation, banks and investors may lose confidence in a government's ability or willingness to pay, and either refuse to roll over existing debts, or demand extremely high interest rates. International financial institutions such as the International Monetary Fund (IMF) may demand austerity measures as part of Structural Adjustment Programmes when acting as lender of last resort . Austerity policies may also appeal to

432-486: A doctrine of neoliberalism in the 20th century. Economist David M. Kotz suggests that the implementation of austerity measures following the 2007–2008 financial crisis was an attempt to preserve the neoliberal capitalist model. In the 1930s during the Great Depression , anti-austerity arguments gained more prominence. John Maynard Keynes became a well known anti-austerity economist, arguing that "The boom, not

504-406: A downturn is due to a significant private-sector financial surplus, in which consumer savings is not fully invested by businesses. In a healthy economy, private-sector savings placed into the banking system by consumers are borrowed and invested by companies. However, if consumers have increased their savings but companies are not investing the money, a surplus develops. Business investment is one of

576-718: A political alliance for the parliamentary election of 2012. Representatives of the Democratic Liberal Party (PDL), in opposition, began negotiations with the ICCD, the New Republic Party (PNR), Christian Democratic National Peasants' Party (PNŢCD), and the Christian Democratic Foundation (DCF). PDL leader Vasile Blaga announced that the negotiations were successful. On 30 August 2012, representatives of PDL, ICCD, PNŢCD, PNR, and FCD launched The Manifest of

648-670: A political party and the FCD was not admitted into the alliance. Thus, on 15 September, representatives of PDL, PNŢCD, and FC have signed a protocol establishing the alliance, and a day later, the ARD has been registered at the Central Electoral Commission. At the legislative election of 9 December 2012, ARD won 16.52% of votes to the Chamber of Deputies , 13.64% of votes to the Senate and 80 seats in

720-556: A private-sector depression (represented by the private- and foreign-sector surpluses) was being "contained" by government deficit spending. Economist Paul Krugman also explained in December 2011 the causes of the sizable shift from private-sector deficit to surplus in the U.S.: "This huge move into surplus reflects the end of the housing bubble, a sharp rise in household saving, and a slump in business investment due to lack of customers." One reason why austerity can be counterproductive in

792-678: A result, some opinion polls do not include the ARD . Opinion polls that show PDL do not show ARD . The UNPR joined USL in August–September 2012, in a sceptical environment. As a result, some opinion polls showed both political entities. The PNG-CD leader George Becali joined the PNL and ran backed by the USL in Bucharest . Furthermore, his former party did not propose any candidates for this election. Out of

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864-498: A stagnant housing market with no realistic opportunity to reduce private debts. In October 2012, the IMF announced that its forecasts for countries that implemented austerity programs have been consistently overoptimistic, suggesting that tax hikes and spending cuts have been doing more damage than expected and that countries that implemented fiscal stimulus , such as Germany and Austria, did better than expected. The IMF reported that this

936-413: Is another person's income. In other words, if everyone is trying to reduce their spending, the economy can be trapped in what economists call the paradox of thrift , worsening the recession as GDP falls. In the past this has been offset by encouraging consumerism to rely on debt, but after the 2008 crisis, this has looked like a less and less viable option for sustainable economics. Krugman argues that, if

1008-741: Is business investment, but there is no reason to expect it to stabilize at full utilization of the economy's resources. High business profits do not necessarily lead to increased economic growth. (When businesses and banks have a disincentive to spend accumulated capital, such as cash repatriation taxes from profits in overseas tax havens and interest on excess reserves paid to banks, increased profits can lead to decreasing growth.) Economists Kenneth Rogoff and Carmen Reinhart wrote in April 2013, "Austerity seldom works without structural reforms – for example, changes in taxes, regulations and labor market policies – and if poorly designed, can disproportionately hit

1080-437: Is considerable excess capacity, an increase in government borrowing to finance an increase in the deficit does not lead to higher interest rates and does not crowd out private investment. Instead, the higher demand resulting from the increase in the deficit bolsters employment and output directly. The resultant increase in income and economic activity in turn encourages, or "crowds in", additional private spending. Some argue that

1152-403: Is grounded in liberal economics ' view of the state and sovereign debt as deeply problematic. Blyth traces the discourse of austerity back to John Locke 's theory of private property and derivative theory of the state, David Hume 's ideas about money and the virtue of merchants , and Adam Smith 's theories on economic growth and taxes. On the basis of classic liberal ideas, austerity emerged as

1224-418: Is known about the size of multipliers, as data availability limits the scope for empirical research. For these countries, Nicoletta Batini , Luc Eyraud and Anke Weber propose a simple method—dubbed the "bucket approach"—to come up with reasonable multiplier estimates. The approach bunches countries into groups (or "buckets") with similar multiplier values, based on their characteristics, and taking into account

1296-474: Is no wonder that, after nearly three years of record low interest rates and massive liquidity injections, industrial economies are still doing so poorly. Flow of funds data for the U.S. show a massive shift away from borrowing to savings by the private sector since the housing bubble burst in 2007. The shift for the private sector as a whole represents over 9 percent of U.S. GDP at a time of zero interest rates. Moreover, this increase in private sector savings exceeds

1368-512: Is offset by greater increases in aggregate demand (private consumption, private investment, and exports). The origin of modern austerity measures is mostly undocumented among academics. During the United States occupation of Haiti that began in 1915, the United States utilized austerity policies where American corporations received a low tax rate while Haitians saw their taxes increase, with

1440-399: Is one of three major financial sectoral balances in a country's economy, along with the foreign financial sector (capital account) and the private financial sector. By definition, the sum of the surpluses or deficits across these three sectors must be zero. In the U.S. and many Eurozone countries other than Germany, a foreign financial surplus exists because capital is imported (net) to fund

1512-453: Is operating at or near capacity, higher short-term deficit spending (stimulus) can cause interest rates to rise, resulting in a reduction in private investment, which in turn reduces economic growth. Where there is excess capacity, the stimulus can result in an increase in employment and output. Alberto Alesina , Carlo Favero, and Francesco Giavazzi argue that austerity can be expansionary in situations where government reduction in spending

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1584-808: The CIA World Factbook , from 2010 to 2011, the unemployment rates in Spain, Greece, Ireland, Portugal, and the UK increased. France and Italy had no significant changes, while in Germany and Iceland the unemployment rate declined. Eurostat reported that Eurozone unemployment reached record levels in March 2013 at 12.1%, up from 11.6% in September 2012 and 10.3% in 2011. Unemployment varied significantly by country. Economist Martin Wolf analyzed

1656-503: The Chamber of Deputies and the Senate . At the time of the elections, despite the severe weather in several parts of the country, the turnout was approximately 42%, slightly higher than the last parliamentary elections held in 2008 which saw a turnout of 39%. The Social Liberal Union (USL) obtained a huge majority in both the Chamber of Deputies and the Senate, with 60% and 59% respectively of

1728-464: The Constitutional Court of Romania who invalidated the law on 27 June 2012 and reinstated the old one. A consequence of this is that after the 2012 parliamentary elections the size of the new Parliament grew to a record total number of 588, an added 117 seats than in the last parliament: 39 supplementary Senate seats, and 97 supplementary Chamber of Deputies seats, including the 18 seats for

1800-694: The Parliament , which came to PDL (74 seats), FC (4 seats), PNȚCD (1 seat), and PNR (1 seat). On 10 December 2012, ARD was dissolved. Notes : Right Romania Alliance members: PDL (22 senators and 52 deputies), FC (1 senator and 3 deputies), and PNȚCD (1 senator and 1 deputy). 2012 Romanian legislative election Victor Ponta USL ( PSD ) Victor Ponta USL ( PSD ) Parliamentary elections were held in Romania on 9 December 2012. The Social Liberal Union (USL) co-led by former Prime Minister Victor Ponta won an absolute majority in both

1872-552: The Roșia Montană mining project . Although 62% of those who voted voiced support for the controversial project, the referendum did not meet the required turnout of 50%, as only 43,2% of voters turned up. The second referendum was held in the communes of Limanu , Costinești as well as in the city of Mangalia and asked voters to say whether they were in favor or against the use, by Chevron , of shale gas extraction by means of hydraulic fracturing . This referendum failed to meet

1944-487: The Social Democratic Party , Victor Ponta as Prime Minister . In May 2012, the new USL government passed an electoral law in parliament, which changed the election system to a single-round FPTP system without the 5% electoral threshold with extra seats for minorities, both ethnic minorities and Romanian minorities. However, after PDL, fearing poor results in the elections ahead because of it , appealed

2016-579: The Social Liberal Union (USL) leaders Victor Ponta ( PSD ) and Crin Antonescu ( PNL ), then called for early elections . However, as the three parties behind the government (namely the PDL , UDMR/RMDSZ , and UNPR ) still relied on a slight parliamentary majority, an ad interim solution was agreed with the opposition that the government could stay in power until the next elections, conditional of electing

2088-579: The Weimar Republic of Germany were unpopular and contributed towards the increased support for the Nazi Party in the 1930s. Austerity measures are typically pursued if there is a threat that a government cannot honour its debt obligations. This may occur when a government has borrowed in currencies that it has no right to issue, for example a South American country that borrows in US dollars . It may also occur if

2160-660: The local election , PSD , and the National Union for the Progress of Romania – UNPR formed the Centre Left Alliance, thus UNPR joining USL in mid 2012. For the 2012 local election PDL formed various county-level alliances with a wide range of parties, including UNPR . Following the presidential impeachment referendum it urged the formation of a political alliance with a number of minor political parties and foundations, such as New Republic led by Mihail Neamțu, and

2232-508: The trade deficit . Further, there is a private-sector financial surplus because household savings exceed business investment. By definition, a government budget deficit must exist so all three net to zero: for example, the U.S. government budget deficit in 2011 was approximately 10% of GDP (8.6% of GDP of which was federal), offsetting a foreign financial surplus of 4% of GDP and a private-sector surplus of 6% of GDP. Wolf explained in July 2012 that

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2304-500: The "crowding-in" model is an appropriate solution for current economic conditions. According to economist Martin Wolf , the U.S. and many Eurozone countries experienced rapid increases in their budget deficits in the wake of the 2008 crisis as a result of significant private-sector retrenchment and ongoing capital account surpluses. Policy choices had little to do with these deficit increases. This makes austerity measures counterproductive. Wolf explained that government fiscal balance

2376-539: The 12 contesting parties running for the Chamber of Deputies and the Senate , only three submitted a full list of candidates: Social Liberal Union (USL), Right Romania Alliance (ARD), and the Democratic Alliance of Hungarians in Romania (UDMR/RMDSZ). People's Party - Dan Diaconescu (PP-DD) submitted a list with one candidate less than all the available colleges. Only one independent candidate decided to run for

2448-448: The OECD and associated international finance organisations have framed the debate to promote austerity, for example, the concept of 'wage-push inflation' which ignores the role played by the profiteering of private companies, and seeks to blame inflation on wages being too high. According to a 2020 study, austerity increases the risk of default in situations of severe fiscal stress, but reduces

2520-509: The Senate and 12 for the Chamber of Deputies. There were 18 national minorities associations proposing one candidate each for the Chamber of Deputies. The Social Liberal Union (USL) maintained majority in both the Chamber of Deputies and the Senate. Two local non-binding referendums were also organized on 9 December, concerning environmental issues. The first one took place in Alba county and people were asked whether they were in favor or against

2592-610: The United Right , that created the alliance. On 5 September 2012, the PNŢCD chairman, Aurelian Pavelescu announced that leaders determined that pole will be named Right Romania Alliance (ARD) and the logo will be a heart. On 7 September 2012, the National Convention of Civic Force (FC) elected Ungureanu as party leader. FC shortly joined the alliance, thereby replacing the ICCD (which was an NGO). PNR has had problems registering as

2664-529: The alternative of the government running a higher budget deficit. In the aftermath of the Great Recession , austerity measures in many European countries were followed by rising unemployment and slower GDP growth. The result was increased debt-to-GDP ratios despite reductions in budget deficits. Theoretically in some cases, particularly when the output gap is low, austerity can have the opposite effect and stimulate economic growth. For example, when an economy

2736-582: The austerity policy of the Eurozone achieves not only the reduction of budget deficits. The goal of economic consolidation influences the future development of the European social model . With the exception of Germany, each of these countries had public-debt-to-GDP ratios that increased from 2010 to 2011, as indicated in the chart at right. Greece's public-debt-to-GDP ratio increased from 143% in 2010 to 165% in 2011 Indicating despite declining budget deficits GDP growth

2808-435: The budget deficit by bringing government revenues closer to expenditures. Proponents of these measures state that this reduces the amount of borrowing required and may also demonstrate a government's fiscal discipline to creditors and credit rating agencies and make borrowing easier and cheaper as a result. In most macroeconomic models, austerity policies which reduce government spending lead to increased unemployment in

2880-496: The case of Alberto Alesina (2009), whose pro-austerity works were "thoroughly debunked by the likes of the economists, the IMF, and the Centre for Budget and Policy Priorities (CBPP)." Other anti-austerity economists, such as Seymour have argued that the debate must be reframed as a social and class movement, and its impact judged accordingly, since statecraft is viewed as the main goal. Further, critics such as Major have highlighted how

2952-480: The centre-right Civic Initiative led by Mihai Răzvan Ungureanu . Eventually Ungureanu joined a minor party, Civic Force (FC), and was elected its president. The alliance registered at the Central Electoral Bureau was called Right Romania Alliance – ARD formed by PDL , PNȚCD , and FC . The PDL centred ARD alliance was formed late after the 2012 Romanian presidential impeachment referendum . As

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3024-452: The change in GDP, according to the equation derived from the IMF data used in his analysis. Similarly, economist Paul Krugman analyzed the relationship between GDP and reduction in budget deficits for several European countries in April 2012 and concluded that austerity was slowing growth. He wrote: "this also implies that 1 euro of austerity yields only about 0.4 euros of reduced deficit, even in

3096-419: The collapse into massive fiscal deficit between 2007 and 2009, because there was none of any importance. The collapse is explained by the massive shift of the private sector from financial deficit into surplus or, in other words, from boom to bust." Wolf also wrote that several European economies face the same scenario and that a lack of deficit spending would likely have resulted in a depression. He argued that

3168-408: The deficit causes interest rates to rise and higher interest rates reduce or "crowd out" private investment, reducing growth. This theory explains why large and sustained government deficits take a toll on growth: they reduce capital formation. But this argument rests on how government deficits affect interest rates, and the relationship between government deficits and interest rates varies. When there

3240-427: The effect of (some) temporary factors such as the state of the business cycle. Different tax and spending choices of equal magnitude have different economic effects: For example, the U.S. Congressional Budget Office estimated that the payroll tax (levied on all wage earners) has a higher multiplier (impact on GDP) than does the income tax (which is levied primarily on wealthier workers). In other words, raising

3312-732: The ethnic minorities parties and organisations. In late 2010, the PSD+PC Alliance broke up without affecting the MEP seat held by the PC . In January 2011, the National Liberal Party – PNL and the Conservative Party – PC formed the Centre Right Alliance – ACD . In February 2011, ACD together with the Social Democratic Party – PSD formed the Social Liberal Union – USL . Following

3384-440: The increase in government borrowings (5.8 percent of GDP), which suggests that the government is not doing enough to offset private sector deleveraging." Many scholars have argued that how the debate surrounding austerity is framed has a heavy impact on the view of austerity in the public eye, and how the public understands macroeconomics as a whole. Wren-Lewis, for example, coined the term 'mediamacro', which refers to "the role of

3456-417: The longer term, reduced government spending can reduce GDP growth if, for example, cuts to education spending leave a country's workforce less able to do high-skilled jobs or if cuts to infrastructure investment impose greater costs on business than they saved through lower taxes. In both cases, if reduced government spending leads to reduced GDP growth, austerity may lead to a higher debt-to-GDP ratio than

3528-637: The major components of GDP. For example, a U.S. private-sector financial deficit from 2004 to 2008 transitioned to a large surplus of savings over investment that exceeded $ 1 trillion by early 2009, and remained above $ 800 billion into September 2012. Part of this investment reduction was related to the housing market, a major component of investment. This surplus explains how even significant government deficit spending would not increase interest rates (because businesses still have access to ample savings if they choose to borrow and invest it, so interest rates are not bid upward) and how Federal Reserve action to increase

3600-632: The mayoral mandates already expired in June 2012, this was ruled unconstitutional. The local elections were eventually held on 10 June , with an unexpected runoff and three repeated elections on 17 June. The political alliance Social Liberal Union (USL), at that time comprising the three parties PSD , PNL , and PC , initiated and succeeded to vote a motion of no confidence against Mihai Răzvan Ungureanu and his cabinet on 27 April 2012 after just two months in office. Afterwards, former President Traian Băsescu nominated then opposition leader and president of

3672-404: The media reproducing particularly corrosive forms of economic illiteracy—of which the idea that deficits are ipso facto 'bad' is a strong example." This can go as far as ignoring economists altogether; however, it often manifests itself as a drive in which a minority of economists whose ideas about austerity have been thoroughly debunked being pushed to the front to justify public policy, such as in

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3744-673: The money supply does not result in inflation (because the economy is awash with savings with no place to go). Economist Richard Koo described similar effects for several of the developed world economies in December 2011: "Today private sectors in the U.S., the U.K., Spain, and Ireland (but not Greece) are undergoing massive deleveraging [paying down debt rather than spending] in spite of record low interest rates. This means these countries are all in serious balance sheet recessions . The private sectors in Japan and Germany are not borrowing, either. With borrowers disappearing and banks reluctant to lend, it

3816-494: The old man was very indignant because his pension was not recalculated, although he had worked all his life in mining. The President of PDL Vrancea, Alin Trășculescu, was caught in the act by anticorruption prosecutors while receiving €50,000 from a businessman in the form of bribe. He was detained for 24 hours for allegations of lobbyism, instigation to false and incitement to the misdemeanor of money laundering. Alin Trășculescu

3888-424: The only other political groups that won seats in the Senate. Several parties of ethnic minorities also received individual seats in the Chamber of Deputies. Following weeks of demonstrations against austerity measures demanded by the International Monetary Fund for a multi-billion US dollar loan, former Prime Minister Emil Boc ( PDL ) resigned on 6 February 2012. The opposition, represented at that time by

3960-418: The payroll tax by $ 1 as part of an austerity strategy would slow the economy more than would raising the income tax by $ 1, resulting in less net deficit reduction. In theory, it would stimulate the economy and reduce the deficit if the payroll tax were lowered and the income tax raised in equal amounts. The term "crowding out" refers to the extent to which an increase in the budget deficit offsets spending in

4032-408: The poor and middle class. Our consistent advice has been to avoid withdrawing fiscal stimulus too quickly, a position identical to that of most mainstream economists." To help improve the U.S. economy, they (Rogoff and Reinhart) advocated reductions in mortgage principal for 'underwater homes' – those whose negative equity (where the value of the asset is less than the mortgage principal) can lead to

4104-513: The private sector is unable or unwilling to consume at a level that increases GDP and employment sufficiently, then the government should be spending more in order to offset the decline in private spending. Keynesian theory is proposed as being responsible for post-war boom years, before the 1970s, and when public sector investment was at its highest across Europe, partially encouraged by the Marshall Plan . An important component of economic output

4176-399: The private sector resulted in calls to cut back the profligacy of the public sector.) According to Mark Blyth , the concept of austerity emerged in the 20th century, when large states acquired sizable budgets. However, Blyth argues that the theories and sensibilities about the role of the state and capitalist markets that underline austerity emerged from the 17th century onwards. Austerity

4248-400: The private sector. Economist Laura Tyson wrote in June 2012, "By itself an increase in the deficit, either in the form of an increase in government spending or a reduction in taxes, causes an increase in demand". How this affects output, employment, and growth depends on what happens to interest rates: When the economy is operating near capacity, government borrowing to finance an increase in

4320-600: The relationship between cumulative GDP growth in 2008 to 2012 and total reduction in budget deficits due to austerity policies in several European countries during April 2012 (see chart at right). He concluded, "In all, there is no evidence here that large fiscal contractions budget deficit reductions bring benefits to confidence and growth that offset the direct effects of the contractions. They bring exactly what one would expect: small contractions bring recessions and big contractions bring depressions." Changes in budget balances (deficits or surpluses) explained approximately 53% of

4392-656: The required turnout as well. Although a report by the OSCE stated the elections were administered "professionally and efficiently", the electioneering , initiated on 9 November and ended on 8 December, was not without incidents. Dan Diaconescu , candidate from PP-DD in the same college of Chamber of Deputies in Târgu Jiu with Prime Minister Victor Ponta , is investigated for electoral bribery. Authorities were notified after PSD representatives within Gorj County Council filed

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4464-517: The risk of default in situations of low fiscal stress. During the European debt crisis , many countries embarked on austerity programs, reducing their budget deficits relative to GDP from 2010 to 2011. According to the CIA World Factbook , Greece decreased its budget deficit from 10.4% of GDP in 2010 to 9.6% in 2011. Iceland, Italy, Ireland, Portugal, France, and Spain also decreased their budget deficits from 2010 to 2011 relative to GDP but

4536-529: The short run. No wonder, then, that the whole austerity enterprise is spiraling into disaster." The Greek government-debt crisis brought a package of austerity measures, put forth by the EU and the IMF mostly in the context of the three successive bailouts the country endured from 2010 to 2018; it was met with great anger by the Greek public, leading to riots and social unrest. On 27 June 2011, trade union organizations began

4608-421: The short term. These reductions in employment usually occur directly in the public sector and indirectly in the private sector . Where austerity policies are enacted using tax increases, these can reduce consumption by cutting household disposable income . Reduced government spending can reduce gross domestic product (GDP) growth in the short term as government expenditure is itself a component of GDP. In

4680-471: The slump, is the right time for austerity at the Treasury." Contemporary Keynesian economists argue that budget deficits are appropriate when an economy is in recession, to reduce unemployment and help spur GDP growth. According to Paul Krugman , since a government is not like a household, reductions in government spending during economic downturns worsen the crisis. Across an economy, one person's spending

4752-467: The sudden shift in the private sector from deficit to surplus forced the U.S. government balance into deficit: "The financial balance of the private sector shifted towards surplus by the almost unbelievable cumulative total of 11.2 per cent of gross domestic product between the third quarter of 2007 and the second quarter of 2009, which was when the financial deficit of US government (federal and state) reached its peak. ... No fiscal policy changes explain

4824-605: The votes and in MP mandates, namely a record number of 395 seats. Far behind, the Right Romania Alliance (ARD) came in second place with only 17% of the vote and 80 seats, losing about half of what they won as the Democratic Liberal Party (PDL) in 2008. The ARD was officially dissolved after the elections. People's Party – Dan Diaconescu (PP–DD) and the Democratic Alliance of Hungarians in Romania (UDMR/RMDSZ) were

4896-421: The wealthier class of creditors, who prefer low inflation and the higher probability of payback on their government securities by less profligate governments. More recently austerity has been pursued after governments became highly indebted by assuming private debts following banking crises. (This occurred after Ireland assumed the debts of its private banking sector during the European debt crisis . This rescue of

4968-415: Was due to fiscal multipliers that were considerably larger than expected: for example, the IMF estimated that fiscal multipliers based on data from 28 countries ranged between 0.9 and 1.7. In other words, a 1% GDP fiscal consolidation (i.e., austerity) would reduce GDP between 0.9% and 1.7%, thus inflicting far more economic damage than the 0.5 previously estimated in IMF forecasts. In many countries, little

5040-491: Was not sufficient to support a decline in the debt-to-GDP ratio for these countries during this period. Eurostat reported that the overall debt-to-GDP ratio for the EA17 was 70.1% in 2008, 80.0% in 2009, 85.4% in 2010, 87.3% in 2011, and 90.6% in 2012. Further, real GDP in the EA17 declined for six straight quarters from Q4 2011 to Q1 2013. Unemployment is another variable considered in evaluating austerity measures. According to

5112-490: Was suspected that the attempt to delay local elections was related to the fact that massive street protests had erupted in the meantime, and, at the same time, the opposition political alliance Social Liberal Union (USL) went on strike in the Parliament , pushing for early parliamentary elections to be called one or two weeks after local elections in June. Initially, the government proposed an election date in November 2012, but as

5184-862: Was under the supervision of National Anticorruption Department for two years. He claimed he could get contracts with the State, from the Ministry of Development and Tourism, led then by Elena Udrea . Austerity In economic policy , austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spending, raising taxes while cutting spending, and lower taxes and lower government spending. Austerity measures are often used by governments that find it difficult to borrow or meet their existing obligations to pay back loans . The measures are meant to reduce

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