It's often presumed that the target of austerity is government deficits. I'm not at all sure I agree. As the FT notes this morning:
The Spanish government has announced its fifth round of budget cuts and tax increases in just nine months, as part of a reform package that could pave the way for an EU bailout and sovereign debt purchases by the European Central Bank.
Under Madrid’s revised budget plans, government spending will be slashed by 8.9 per cent. Next year’s tax receipts are forecast to rise from €170bn to €175bn, helped in part by an increase in sales tax.
Alongside the spending cuts, the government said it would pass 43 new laws over the next six months and establish a new independent budgetary authority to monitor government spending.
The sting is in that tail: a new unelected body is going to preside over these cuts, and presumably be accountable to the EU.
Greece and Italy have lost governments to austerity and democracy with it as the EU has moved in. Now Spain in going that way. How the right wing must love this: they say they're the enemies of the state. Actually they're the enemies of democracy. It is for governments to be accountable: passing the job to the great and good is ne0-feudalism.