AltAusterity Digest #100 May 23-29, 2019

During this week’s EU elections, traditional centre-left and centre-right have lost ground in European Parliament. The top party groups include the 180 seats won by Centre-right parties and 146 seats won by Socialists and Democrats. The hollowing out of the political center at the European level may have implications for the national governments of Germany, Greece and the UK, all of which will soon be holding elections. EU leaders will meet Tuesday to discuss leadership positions such as the president of the European Commission, the European Council President and the presidency of the European Central Bank.

The Pakistani government has projected a 4% growth rate in the upcoming year despite working towards a loan from the International Monetary Fund (IMF). Pakistan’s finance minister, The IMF has projected 2.8% growth for Pakistan next year. Hafeez Shaikh, is expected to introduce a budget that will raise taxes and cut spending. Pakistan’s 13th IMF bailout since the late 1980s requires measures to cut a fiscal deficit estimated at 2.2% of GDP to 0.6%. In order to meet this target, the government will need to cut approximately $5 in spending.

A 24-hour strike in Argentina brought much of the country to a halt as flights were grounded, buses stopped running and public services such as banks, courts and schools were closed. Hospitals also offered reduced services. The strike was organized in protest to President Macri’s austerity policies including firing workers and slashing subsidies that had been offsetting the costs of transportation and utilities. The recent austerity measures are tied to a $56 IMF bailout package. Many workers outside of the public sector were forced to stay home due to the stoppages.

Greek Prime Minister Alexis Tsipras called for a general election following the poor outcomes for his Syriza party in European the local election. Preliminary polling results in Greece show the conservative New Democracy party gaining 33% of the popular vote, almost 10 points clear of the 24% captured by Syriza. Syriza rose to power in 2015 on an anti-austerity agenda but was unable to roll-out its promises in the post-crisis era. To gain public support before the snap elections Syriza passed legislation on Wednesday to lower sales taxes on food and restaurants, provide for additional pension spending for retirees, and to allow tax debtors to pay their arrears over 120 instalments.

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