Abstract. The Great Recession that started in 2007/2008 has been the worst economic downturn since the crisis of the 1930s in Europe. It led to a major sovereign debt crisis, which is arguably the biggest challenge for the European Union (EU) and its common currency. Not since the 1950s have advanced democracies experienced such a dramatic external imposition of austerity and structural reform policies through interor supranational organisations such as the EU and the International Monetary Fund (IMF) or as implicitly requested by international financial markets. Did this massive interference with the room for maneuver of parliaments and governments in many countries erode support for national democracy in the crisis since 2007? Did citizens realise that their national democratic institutions were no longer able to effectively decide on major economic and social policies, on economic and welfare state institutions? And did they react by concluding that this constrained democracy no longer merited further support? These are the questions guiding this article, which compares 26 EU countries in 2007-2011 and re-analyses 78 national surveys. Aggregate data from these surveys is analysed in a time-series cross-section design to examine changes in democratic support at the country level. The hypotheses also are tested at the individual level by estimating a series of cross-classified multilevel logistic regression models. Support for national democracy -operationalised as satisfaction with the way democracy works and as trust in parliament -declined dramatically during the crisis. This was caused both by international organisations and markets interfering with national democratic procedures and by the deteriorating situation of the national economy as perceived by individual citizens.

As often pointed out in the literature on the European debt crisis, the policy programme of austerity and internal devaluation imposed on countries in the Eurozone's periphery exhibits a lack of democratic legitimacy. This article analyses the consequences these developments have for democratic support at both the European and national levels. We show that through the policies of economic adjustment, a majority of citizens in crisis countries has become 'detached' from their democratic political system. By cutting loose the Eurozone's periphery from the rest of Europe in terms of democratic legitimacy, the Euro has divided the union, instead of uniting it as foreseen by its architects. Our results are based on aggregated Eurobarometer surveys conducted in 28 European Union (EU) member states between 2002 and 2014. We employ quantitative time-series cross-sectional regression analyses. Moreover, we estimate the causal effect of economic adjustment in a comparative case study of four cases using the synthetic control method.

Abstract:What are the conditions under which some austerity programs rely on substantial cuts to social spending? More specifically, do the partisan complexion and the type of government condition the extent to which austerity policies imply welfare state retrenchment? We demonstrate that large budget consolidations tend to be associated with welfare state retrenchment. Our findings support a partisan and a politico-institutionalist argument: (i) in periods of fiscal consolidation, welfare state retrenchment tends to be more pronounced under left-wing governments. (ii) Since welfare state retrenchment is electorally and politically risky, it also tends to be more pronounced when pursued by a broad pro-reform coalition government. Therefore, we show that during budget consolidations implemented by left-wing broad coalition governments, welfare state retrenchment is greatest. Using long-run multipliers from autoregressive distribute lag models on 17 OECD countries during the 1982-2009 period, we find substantial support for our expectations.

Under what political conditions do governments consolidate their public finances? In this article we focus on two factors: the partisan complexion of governments and the breadth of the governing coalition. We demonstrate that the probability for a government to initiate a fiscal consolidation program is highest under parties of the political right, as well as, under narrow reform coalitions (which we operationalize as one party governments and minimal winning coalitions). We observe the exact opposite when it comes to the extent of these adjustment measures. Here, the breadth of the policy coalition exerts a positive influence. Along these lines, consolidation packages implemented by right parties are smaller in size than those of their centrist or leftist competitors. On the basis of a quantitative analysis of 17 OECD countries between 1978 and 2009, we explain these findings with the strategic and electoral options of political actors.

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