Wednesday, April 18, 2012

European Austerity Economic Policy – Yes It Is a Matter of Life or Death

Suicides in Weak Economies Increase

The cliché that something is a matter of life or death is used so often that even when something is a matter of life or death no one really believes that to be case.  Such must be the situation with policy makers in Europe who have imposed stringent economic austerity on countries like Greece, Ireland, Spain and Portugal in order to ‘cure’ these nations of their economic sickness.

The ‘cure’ is producing an increase in suicides in those countries and others.  Yes it is statistically difficult to measure suicide rates and it is logically difficult to ascribe an increase in suicides solely to economic conditions.  But the facts are that suicides among young to middle aged men who have been economically devastated by the policy imposed severe recession is increasing.

The economic downturn that has shaken Europe for the last three years has also swept away the foundations of once-sturdy lives, leading to an alarming spike in suicide rates. Especially in the most fragile nations like Greece, Ireland and Italy, small-business owners and entrepreneurs are increasingly taking their own lives in a phenomenon some European newspapers have started calling “suicide by economic crisis.”. . .

A complete picture of the phenomenon across Europe is elusive, as some countries lag in reporting statistics and coroners are loath to classify deaths as suicides, to protect surviving family members. But it is clear that countries on the front line of the economic crisis are suffering the worst, and that suicides among men have increased the most.

The tragedy of course is that this was a preventable problem.  Yes Greece and Ireland had severe economic difficulties and unsustainable budget deficits resulting from their own horrible management of their economies.  But the answer was to implement policy that would have produced growth and higher employment, instead of policy that created just the opposite.

“Financial crisis puts the lives of ordinary people at risk, but much more dangerous is when there are radical cuts to social protection,” said David Stuckler, a sociologist at the University of Cambridge, who led a study published in The Lancet that found a sharp rise in suicides across Europe, particularly in seriously affected countries like Greece and Ireland from 2007 to 2009, years that coincided with the downturn.

“Austerity can turn a crisis into an epidemic,” Mr. Stuckler added.

How bad is the policy.  In Italy, for example, the government is not paying what it owes to legitimate businesses, and the result is this.

Such circumstances are sometimes reversed in Italy, where in some cases it is the government that has not paid its debts to struggling businessmen. National legislation aimed at curbing public spending has caused state and local administrations to rack up billions of dollars in outstanding bills with creditors, putting a squeeze on many small businesses.

“That is the madness of this crisis, that people kill themselves because they haven’t been paid by public institutions,” said Massimo Nardin, a spokesman for the Padua Chamber of Commerce.

And so once again future generations will look back and ask “What were you people thinking?” and once again policy makers will have to reply that thinking was not part of what they were doing.

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