The Eurozone crisis has made monetary issues the focal point of political debate about the nature of the European Union, not just within members of the common currency but across the 27 states that constitute the EU. Discussions about emergency bailouts and transfers to support struggling economies have distorted the public perception of the costs and benefits of the Union.
The actual EU budget is based on a multiannual financial framework, negotiated among the individual members and agreed upon at the level of European institutions. The current financial framework covers the period 2007–2013. Negotiations for the framework from 2014 to 2020 are under way. These discussions are greatly influenced by the implications of the current crisis. In a feature for the “In Focus” section of Political Insight (September 2012, Volume 3, Issue 2) Danny Dorling and I looked at the current financial framework and how the money is redistributed across the member states.
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Europe in debt
People across the worst hit countries by the proposed austerity measures to reduce national debt levels gathered on the streets of many European cities to protest against public spending cuts. The financial crash hugely affected many government across the EU with little signs of a quick recovery of the public debt levels.
The following map shows how Europe is left in deficit two years after Lehman (and that in fact the EURO zone isn’t worse off than EU members without the common currency). There may be signs of recovery, but this picture will certainly stay with us for a while:
