Written by Lawrence Zammit, 24 June 2013
It would seem that within the European Union the tune is changing. Although fiscal prudence remains the norm, it is no longer the be all and end all of fiscal policy. There is recognition that too much austerity puts an economy into a recession, which may not cause lasting damage. Thus European political leaders are now speaking of the need for policies that generate employment and economic growth.
These policies tend to focus on structural reforms, that include simplifying regulations, strengthening the educational system, making labour markets more flexible, and making welfare systems sustainable.
However the public at large has certain expectations, which need to be managed. Their main expectation is none of these reforms take away any of the benefits that they have been enjoying up to now.
Economic policy makers across Europe, including Malta, have to contend with a change in culture. We have moved from an Oliver Twist culture of, “Please, Sir, can I have some more?”, to an empowerment culture of “I will teach you how to fish so you can look after yourself” , to a culture of dependency of “I insist, I am entitled to more”.
Everyone seems to be entitled to something, and the list is increasing. The question that we need to ask is, “To what extent is these entitlements real and to what extent are they perceived entitlements?” Either way, public expectations have to be managed if these structural reforms are to have the beneficial effect that is expected.