Austerity, labour market segmentation and emigration: the case of Lithuania

Abstract

The so-called 'Baltic model' of austerity sometimes receives uncritical praise from advocates of tightened austerity. This model has achieved an almost uncontested vogue among international finance officials and European Union policy makers who portray it as a 'socially costless' template for other crisis economies. The article examines the impact of austerity on Baltic Lithuania, a peripheral newer EU member state, and suggests that the harsh austerity measures adopted by its government in order to restore fiscal balance have been far from socially costless. Austerity has accelerated fragmentation of the labour market into a differentially advantaged primary (largely public) sector, and an increasingly informalised secondary (low-skill manufacturing and services) sector, stimulating extraordinarily high levels of emigration as the population, especially younger persons, depart from the country. We describe this here as the formation of a new austeriat.

Austerity stabilised through European funds: the impact on Slovenian welfare administration and provision

“…While the findings presented in this article complement existing research by showing that the increasing need to manage EU funds has created new privileged types of transnational intermediary public servants, who reap high symbolic and material rewards, they further demonstrate that on the other hand this weakens the public sectors' human resource and financial capacities for welfare policy development and provision. By providing these new empirical perspectives, this article has extended the notions of previous research exploring the increasing centralisation within the EU governance and its effects on public administration and provision (Bonnet, 2016;Catalano and Graziano, 2016;Juska and Woolfson, 2015;Nay, 2002).…”

“…In the context of budget constraints, the implementation of CSRs became possible through the ESF that enabled a move from passive to active labour market policies (Bonnet, ; Meardi, ). This has further intensified after the economic crisis, when European funds began to act as a stabiliser for EU‐induced austerity measures, as is shown in the case of Lithuania (Juska and Woolfson, ). Likewise, in Slovenia, an increasing use of European funds is linked to fiscal discipline and the consequent imposition of austerity measures after the economic crisis.…”

“…It includes and rewards those who participate in networks, are highly mobile and capable of moving between economic and geographical spaces and thus have the ability to integrate into new projects, which in itself becomes a sign of a higher social status (Boltanski and Chiapello, ). For instance, in Lithuania, the needs to administer EU‐funded projects created a new ‘EU‐financed nomenklatura’, a privileged new type of public servant with high levels of social and cultural capital that is accumulated through transnational networks and enables upward social and professional mobility (Juska and Woolfson, : 243). While the new EU‐funded public management can act as an indispensable mediating link between international institutions and local providers, ESF's projective form of organising might not bring the same rewards to other workers within the public welfare provision.…”

“…In this regard, the research highlights the specificity of new post‐socialist EU member states that were during and after the enlargement much more pressured to engage in institutional reorganisation in order to use European funds (Bonnet, ; Catalano and Graziano, ; Meardi, ). Moreover, the Lithuanian case study demonstrates that with the economic crisis, European funds began to act as a stabiliser for EU‐induced austerity measures (Juska and Woolfson, ). This article examines the case of Slovenia that has faced increasing budgetary pressures to introduce fiscal discipline and adopt austerity measures after the economic crisis, which has caused a decline in welfare spending and an increased dependence upon the European Social Fund (ESF) in welfare administration and provision (Kobal‐Tomc et al ., ; Smolej‐Jež et al ., ).…”

The Costs of Austerity: Labor Emigration and the Rise of Radical Right Politics in Central and Eastern Europe

“…Austerity has also been linked to increasing emigration from CEE countries. While the post-2008 spike in emigration was prompted, to a large degree, by the contraction of the economy and the increase in unemployment caused by the financial crisis, the austerity measures put into place afterwards, which weakened social benefits and protections, also significantly contributed to the outward movement of labor from many Baltic and Eastern European nations (Juska and Woolfson, 2015). Some scholars explain this phenomenon as the result of the labor market segmentation driven by austerity, where the primary (Eurostat, 2018).…”