Explaining protest in the aftermath of the great recession in europe

Jun 10 By Diego Muro and Guillem Vidal. The financial crisis that started in had an unanticipated magnitude. What at first glance appeared as a manageable frailty of the financial sector rapidly derived into a Great Recession with on-going continuity into The enlargement of a gap or, rather, three distinct gaps within Europe constitutes the resulting political consequences of this complex multi-dimensional economic crisis, namely gaps between: citizens and politicians; rich and poor countries; and citizens themselves.

The fissure between citizens and European institutions has long been a problem for the European project. Levels of political mistrust towards European institutions have reached unprecedented levels in the last few years.

According to data from the Eurobarometer, the average mistrust towards European institutions increased significantly since the collapse of the American investment bank Lehman Brothers in September of The increase of abstention at European Elections is also a reflection of the lack of a strong connection between the EU and the European citizenry. As it can be observed in Figure 1, turnout in European elections has been declining since the s whereas levels of political mistrust towards the EP have soared, particularly since the start of the Great Recession, indicated in the figure 1 with a vertical red dotted line.

The figure indicates that citizens have a persistent lack of interest in going to the polls every five years and that political disaffection is only but growing. Hence, to the old issue of being ignored by the citizenry, who used the European elections as mid-term opportunities to punish their national governments, the EP now has the challenge of regaining a lost confidence. Levels of mistrust particularly increased after when several European countries adopted a series of structural reforms in order to deal with market confidence and in- stability in the Eurozone.

In addition, countries in which citizens suffered the most from the austerity measures such as spending cuts and tax rises displayed some of the lowest levels of trust towards EU policy-making institutions. However, the significant increase in the parliamentary representation of eurosceptic parties throughout Europe in the elections shows that increasing mistrust is a widespread phenomenon that does not belong to some countries exclusively.

There are two possible explanations for the rise of political mistrust in EU member states. The first one is economic and would argue that voters punish their representatives indiscriminately for the rise of unemployment rates. This behaviour would be in line with theories of economic voting that argue that citizens use the ballot box to punish those responsible for economic downturns. The second explanation is political and would explain rising levels of mistrust for the inability of politicians to react adequately to the economic challenge.

This sort of argument would connect with research that point at the difficulty of citizens in identifying who is truly responsible for political outcomes in multi-level polities like the EU. Allocating responsibility for the crisis is complicated by the fact that it is not entirely clear who is to blame for the Great Recession. The management and response of the economic crisis has not been left to national politicians exclusively, who have often alleged a lack of feasible alternatives to the painful reforms thus shifting blame towards EU and international institutions.

explaining protest in the aftermath of the great recession in europe

The EU and the ECB as well as international institutions such as the IMF have had their say in how states should manage their national economies, though it is unclear to what extent they are to be held responsible for the reforms as they are limited to giving recommendations and the ultimate competence of implementing such policies was of national institutions. According to the latest Eurobarometer results, however, 63 per cent of citizens in the EU believe that the EU is to blame for austerity.

In this situation, even informed voters find it difficult to clearly allocate responsibility and use the existing mechanisms of accountability effectively.Enlightened decision making may have blocked another Depression, but it could not prevent a great deal of misery. The financial crisis struck individual countries with an impact that depended heavily on two factors: whether local institutions had ties to the U.

Most of the developed countries had close financial and trade relations with the U. The dynamic economies of Asia were well positioned, and three large Asian countries—India, Indonesia, and China—escaped relatively unscathed. At least in the short run, India benefited from having isolated itself from the crosscurrents of the global economy.

With a large economic stimulus package in place, however, Japan pulled out of recession in the third quarter of Fearful that strict limits on greenhouse gas emissions could cripple the economic rebound, the Japanese government proposed weaker limits than those under discussion in Europe and the U.

Europe, with its close financial and trade ties to the U. Even Norway, which had virtuously invested its North Sea oil revenue with considerable prudence while the U. Norway slipped into a mild slump in late and emerged early in Most of the rest of Europe fared worse. Many countries approved economic stimulus packages to extricate themselves from recession, and many resumed economic growthalthough the U. In the fourth quarter, the U.

Reflecting fears of future inflation, the stimulus programs in Europe were smaller than those in the U. Perhaps more significant, the largesse stopped at national borders. Iceland became the first country to lose its government over the financial crisis.

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Then the tables turned, and the Latvian economy shrank at double-digit rates in —possibly the worst performance in Europe, although its Baltic neighbours, Lithuania and Estonia, were not far behind.

In the Latvian capital of Riga, a street demonstration in January to protest economic decline turned violent, and a month later the prime minister resigned.

A default on its debt would be a giant headache not only for Greece but also for the entire EU. The fiscal problems that put Greece and Spain on a slippery slope were common across Europe, especially among economies that had grown the most largely on borrowed money during the heady early years of the decade. Ireland, heretofore an EU success story, was a typical case.

The Great Recession of — Article Media. Info Print Print. Table Of Contents. Submit Feedback. Thank you for your feedback. Introduction The U. Leads the Way. The World Follows. The U. An Uncertain Future. Load Previous Page.Her publications have focused on conventional and unconventional political behavior, French politics, European public opinion, US-EU relations.

In addition to journal articles and book chapters, her book France, Social Capital and Political Activism Palgrave came out in She is now working on her next project on protest patterns in Europe, pre- and post- economic crisis.

Her methodological research is in the area of time- or spatial-correlated data with complex clustered structure and she has seven years of consultancy experience in the academic context, conducting inter-disciplinary collaboration with researchers from all areas of studies. Pauline has publications, reports and manuscripts in areas of medical sciences, social sciences, economics and statistics.

Accornero, G. Anderson, C. Bermeo, and L. Bartels eds.

explaining protest in the aftermath of the great recession in europe

Armingeon, K. Auvinen, J. Barnes, S. Kaase eds. Beissinger, M. Breslow, N. Calvo, K. Flesher Fominaya, and L. Cox eds. Caren, N.

explaining protest in the aftermath of the great recession in europe

Ghoshal, and V. Dalton, R.

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Van Sickle, and S. Welzel eds. Della Porta, D. Dodson, K. Dubrow, J. Slomczynski, and I. Data file edition 3. Data file edition 4. Data file edition 2. Flesher Fominaya, C.It is likely that ten years of economic crisis have eroded the support of democracy in Europe. But how much? The existing research is divided on this issue. Some claim that the degree of satisfaction with democracy has declined across the whole of Europe during the Great Recession.

Other researchers have found no empirical evidence that the support of democracy as a core value has declined across Europe. They claim that merely the specific support has decreased in some countries. This article will use the data from the European Social Survey to verify both claims. It shows that the Great Recession did not lead to a legitimacy crisis of European democracies and that the diffuse support of democracy remains high in most regions.

The degree to which the specific support of democracy has been weakened is moderated by the type of welfare regime. In countries where the economic crisis did strike hard and the welfare state is weakly developed, the support of democracy has dropped dramatically.

This outcome takes a middle position between two extremes in the ongoing academic debate on the support of democracy. Both positions regarding the increase or decrease of support of and satisfaction with democracy are in need of more nuance by taking into account the impact of welfare regimes. Existing research often assumes a uniform European context that shows either increasing or decreasing levels of satisfaction with democracy.

Our research has shown that the response of citizens to the Great Recession has been influenced by the welfare regime. Aber wie stark? After ten years of economic crisis we may ask to which extent this pessimistic conclusion is still justified given the most recent available data. The Great Recession has had not only financial and economic consequences, but also political ones.

It has weakened the problem-solving capacity of democratic systems which increased dissatisfaction with politics and performance and the trust in politicians in many established democracies.

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In other countries, the support for democracy has not changed, like in Sweden and Germany. These variations within Europe underline the importance of taking into account the national and regional context that impacts on the type and degree of dissatisfaction. Particularly important are the different types welfare regimes of these regions that may strengthen of weaken the effects of the economic crisis on the support of democracy.

By focusing on the moderating effect of welfare states on the support of democracy, this research distinguishes itself from most other work on this topic that neglects the role of welfare regimes. The Great Recession urges for insights into the recent developments in the satisfaction with democracy and the trust in politics and politicians. Does the Great Recession gradually undermine the support of democracy among certain groups in the electorate? In the literature we find different answers to this question.

The research seeks to answer this question by analysing the degree of satisfaction with democracy and government on the basis of data of the European Social Survey ESS. The variation in welfare regimes is relevant for the degree to which the Great Recession erodes the support of democracy. One of the main reasons that the literature arrives at different conclusions regarding the support of democracy is that different research designs have been used.

Great Recession in Europe

The choices which are made in the research design such as the case selection, type of data, data sources, time period, operationalisation and the theoretical and normative propositions all have an impact on the findings.

What is support of democracy? In this research we focus on the effects of the economic crisis on the democratic legitimacy of European democracies. Such legitimate exercise of political power is bound to several criteria Beetham Second, institutionalized power must be open for control and correction by means of the Rule of Law and forms of checks and balances.

These rules and mechanisms secure the political and civil liberties of the individual and of minority groups Stone Sweet Consent does not necessarily mean agreement, but more importantly the willingness to accept decisions and to use the channels offered by the democratic system to express dis content, for example by means of voting or protesting. This may have far reaching consequences for the ways in which elites and masses interact.The European economic crisis has brought economic hardship and prolonged instability to many countries in the European Union.

While economies are struggling to recover, citizens have opted to become more vocal unconventionally. Mass protest, public occupations and demonstrations have dominated Europe.

Yet, numbers of people choosing to protest need to be assessed to verify whether the economic recession is indeed responsible for a surge in protest activism on the continent.

With the use of multiple rounds from the European Social Surveythis article tests the hypothesis linking unconventional political behavior in Europe to the economy. Findings suggest that overall European protest levels are not higher after the crisis, although confrontational activism has spiked in few countries.

Economic variables retain instead an important role in the explanation of protest in the post-recession era, with both objective and subjective economic measures supporting a grievance theory explanation of why Europeans protest. Economic decline matters in the selection of protest as a mode of political participation.

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Location of Repository. Topics:economic crisis; European public opinion; European Social Survey; grievance theory; protest. OAI identifier: oai:siba-ese. Suggested articles.It occurred despite the efforts of the Federal Reserve and U. Department of the Treasury. The crisis led to the Great Recession, where housing prices dropped more than the price plunge during the Great Depression.

That doesn't count those discouraged workers who had given up looking for a job. Inhousing prices started to fall for the first time in decades. They thought the overheated real estate market would return to a more sustainable level. They didn't realize there were too many homeowners with questionable credit. Several studies by the Federal Reserve found it did not increase risky lending.

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If they were shut down, the housing market would collapse because they guarantee the majority of mortgages. Two laws deregulated the financial system. They allowed banks to invest in housing-related derivatives.

explaining protest in the aftermath of the great recession in europe

These complicated financial products were so profitable they encouraged banks to lend to ever-riskier borrowers. This instability led to the crisis. They promised to only invest in low-risk securities to protect their customers.

The Commodity Futures Modernization Act exempted derivatives from regulatory oversight.

The World Follows.

Big banks had the resources to manage these complicated derivatives. The profitability of MBS created more demand for the mortgages they were based upon.

Inbanks began to panic once they realized they would have to absorb the losses, and they stopped lending to each other. The chart below shows a breakdown of how much the financial crisis cost. If the nation's money market accounts had gone bankrupt, business activities and the economy would have ground to a halt.

That crisis called for massive government intervention. Their fast response helped stopped the run, but Republicans blocked the bill for two weeks because they didn't want to bail out banks. They only approved the bill on Oct.Great Recessioneconomic recession that was precipitated in the United States by the financial crisis of —08 and quickly spread to other countries.

Beginning in late and lasting until mid, it was the longest and deepest economic downturn in many countries, including the United States, since the Great Depression — c.

The financial crisis, a severe contraction of liquidity in global financial markets, began in as a result of the bursting of the U.

When interest rates finally began to climb indemand for housing, even among well-qualified borrowers, declined, causing home prices to fall.

Partly because of the higher interest rates, most subprime borrowers, the great majority of whom held adjustable-rate mortgages ARMscould no longer afford their loan payments. Nor could they save themselves, as they formerly could, by borrowing against the increased value of their homes or by selling their homes at a profit.

As the number of foreclosures increased, banks ceased lending to subprime customers, which further reduced demand and prices. As the subprime mortgage market collapsed, many banks found themselves in serious trouble, because a significant portion of their assets had taken the form of subprime loans or bonds created from subprime loans together with less-risky forms of consumer debt see mortgage-backed security ; MBS. Accordingly, businesses were forced to reduce their expenses and investments, leading to widespread job losses, which predictably reduced demand for their products, because many of their former customers were now unemployed or underemployed.

Other major businesses whose products were generally sold with consumer loans suffered significant losses. The car companies General Motors and Chryslerfor example, declared bankruptcy in and were forced to accept partial government ownership through bailout programs. During all of this, consumer confidence in the economy was understandably reduced, leading most Americans to curtail their spending in anticipation of harder times ahead, a trend that dealt another blow to business health.

All these factors combined to produce and prolong a deep recession in the United States. From the beginning of the recession in December to its official end in Junereal gross domestic product GDP —i.

As millions of people lost their homes, jobs, and savings, the poverty rate in the United States increased, from In the opinion of some experts, a greater increase in poverty was averted only by federal legislation, the American Recovery and Reinvestment Act ARRAwhich provided funds to create and preserve jobs and to extend or expand unemployment insurance and other safety net programs, including food stamps.

Notwithstanding those measures, during —10 poverty among both children and young adults those aged 18—24 reached about 22 percent, representing increases of 4 percent and 4. Much wealth was lost as U. Households headed by younger adults, particularly by persons born in the s, lost the most wealth, measured as a percentage of what had been accumulated by earlier generations in similar age groups. They also took the longest time to recover, and some of them still had not recovered even 10 years after the end of the recession.

In the wealth of the median household headed by a person born in the s was nearly 25 percent below what earlier generations of the same age group had accumulated; the shortfall increased to 41 percent in and remained at more than 34 percent as late as Losses of wealth and speed of recovery also varied considerably by socioeconomic class prior to the downturn, with the wealthiest groups suffering the least in percentage terms and recovering the soonest.

For such reasons, it is generally agreed that the Great Recession worsened inequality of wealth in the United States, which had already been significant. According to one study, during the first two years after the official end of the recession, from tothe aggregate net worth of the richest 7 percent of households increased by 28 percent while that of the lower 93 percent declined by 4 percent.

Another study found that between and the aggregate net worth of the richest 1 percent of Americans increased by 7.

When and where did the great recession erode the support of democracy?

As the financial crisis spread from the United States to other countries, particularly in western Europe where several major banks had invested heavily in American MBSsso too did the recession. Most industrialized countries experienced economic slowdowns of varying severity notable exceptions were ChinaIndiaand Indonesiaand many responded with stimulus packages similar to the ARRA.

In some countries the recession had serious political repercussions. In all the countries affected by the Great Recession, recovery was slow and uneven, and the broader social consequences of the downturn—including, in the United States, lower fertility rateshistorically high levels of student debt, and diminished job prospects among young adults—were expected to linger for many years.