AltAusterity Digest #104 June 27-July 3, 2019

OECD Secretary-General Angel Gurria, has claimed that central banks “have run out of ammunition” in working towards economic stimulus. He followed his comment by adding that fiscal policy may now need to play a larger role as historically low interest rates limit the effect that central banks can have. While major central banks such as the U.S. Federal Reserve and the European Central Bank are considering cutting interest rates, there is not much room to manoeuvre. While Gurria has seemed to endorse increased government spending to boost economic activity, he qualified his statement by saying that the countries that do so should have the capacity and do so in a “controlled fashion.”

As the Greek election approaches, the center-right New Democracy Party is leading the governing Syriza by about 10 points. If Syriza are defeated it would represent the end of a failed left-alternative project. Syriza were elected in 2015 with a strong anti-austerity agenda but were forced to implement deep austerity measures as conditions of its Troika bailout. Just as Greece is beginning to recover from these measures, the rest of the Continent is facing several challenges. It is unclear whether the implications of Brexit, the growing euroskepticism of Italy, and plans to create a common European budget for handling crises will cause a further proliferation of alternative populist parties or whether establishment parties will retain and regain control.

Conservative party leader challengers Boris Johnson and Jeremy Hunt have both committed to increased government spending and lower taxes in a post-Brexit context. Johnson, who is favorite to replace Theresa May, has said that he will spend more on education, transport, broadband infrastructure and policing, in addition to cutting taxes. Meanwhile, Hunt has committed to undefined spending and to slashing the corporate tax rate from 19% to 12.5%. The leadership challenger’s commitments come at a time when uncertainty over Brexit has triggered a slowdown in the economy.

A new study from Ireland’s Safefood, also known as The Food Safety Promotion Board, has found that 10% of Irish households suffer “food poverty.” The effects of austerity are considered a major contributing factor as an increasing amount of people have had to rely on charities over the last 11 years. A charity in Cork City offering free meals now provides 2000 meals every week compared to “150 or less” before the crisis. The report states that there are a number of factors which contribute to food poverty including competing pressures with a limited household budget, the unavailability of an adequate range of healthy foods, accessible transport in rural areas and low literacy and education on food.

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