Impacts of the Global Financial Crisis on Cities in Europe
An Introduction to Urban Austerity
In the period since the Wall Street crash, the refurbished rationale for austerity measures is that the imposition of strict fiscal discipline and government spending cuts is the (only) way to restore budgetary integrity – thereby securing the confidence of the investor class, appeasing the jittery markets and paving the way to growth. The critical test case that is Europe, of course, shows no signs of working. (Peck, 2012: 626)
Since 2010, the global financial and economic crisis – which began, in 2008, as a result of the mortgage crisis of 2007 – has transformed into a sovereign debt crisis (Altvater, 2011; Blyth, 2013; Whitfield, 2014). Throughout each of these interconnected phases, cities have been at the center of the turmoil (Gotham, 2009; Hadjimichalis, 2011; Harvey, 2011; Martin, 2011; Blazek & Netrdova, 2012; Donald et al., 2014; Tabb, 2014; Eckardt & Sanchez, 2015). The economic crisis and the “fiscal dictatorship” (Lehndorff, 2012: 8ff) imposed by German and European elites in the years that followed (Bieling, 2011; Hadjimichalis, 2011; Demirovic & Sablowski, 2012) have dramatically affected urban regions: indebted homeowners have been evicted, masses impoverished, public budgets squeezed, municipal infrastructures privatized, public services downsized, and, above all, austerity measures implemented.
In December 2014, more than 80 urban scholars, politicians and social movement activists from ten different countries came together at the Institute for European Urban Studies (IfEU) at Bauhaus-Universität Weimar to share their research on the impacts of the global financial crisis on European cities as well as the experiences these cities have made with urban austerity policies. As a result, the conference has placed an issue that affects most people living in urban regions across Europe into the center of attention: the idea that fiscal austerity is an unavoidable political necessity in spite of its harsh consequences. The seemingly unavoidable hegemonic paradigm driving European politics is the idea that public budgets must be balanced and that this can only be achieved by way of frugal policies and an even leaner state than that which already exists: whether school buildings or bridges are nearly in ruins, public housing, waste management and/or health care are being privatized and reorganized according to profitability, participation in planning processes is being sacrificed on the altar of inter-urban competition, or the masses proclaim their resistance.