One of the most vibrant debates taking place concerns the limitations and possibilities that exist in the EU for going beyond austerity-based social and economic policies. In this post we ask to what extent the outbreak of the COVID-19 pandemic, and the social policy responses it has been triggering, has altered this course, by focusing on the social and labour market policies adopted in reaction to the pandemic by a left-wing Southern European government, that of Spain.
Among the many things of the pre-Corona world that seem to have aged faster since the eruption of the pandemic is the macroeconomic commitment to fiscal restraint. In the last weeks, many pundits have forecast the decline of this principle in light of the massive fiscal stimuli that the post-COVID recovery will require. Will this sequence of ‘emergency Keynesianism’ rapidly followed by austerity be repeated this time?