Paper presented at the Conference “New economic concepts in the current European crises“.

Abstract: The current European crisis started as the infiltration of the global financial crisis. The real economy was hit badly by the sudden contraction of the financial sector. The European Commission’s recovery plan of 2008, followed by most member states at that time, built on the quick restoration of demand and trust, mostly based on increased public expenditure. However, instead of reaching these objectives, the chapter of public finances crisis opened up for many parts of Europe in 2010-2011. The growth objectives could not be reached either. Instead, political and social crises unfolded, mostly in the periphery of the Eurozone. Lately, growth and employment have again come to the forefront of European policies, and austerity measures are highly denied by more and more political forces and societies. But, despite such policy shifts, the problems are still not solved.
The question arises why practically all European crisis management measures of the past years have failed. We believe that the overall failure is to be explained by micro and meso level reasons: the problems usually come when the originally ‘nice’ ideas come to implementation. In order to understand these problems, we have to examine the efficiency outlooks of top-down policies in general, and the fate of economic and social policies which do not build strongly on the values determining the behaviour of the targeted actors. From this viewpoint, therefore, it is extremely important that these values are identified in their broad variety across Europe, and that any economic policy leadership, be it national or European, relies on these deeply-rooted values. Also, any policy aiming at inducing changes, should target the influencing of these values, convictions, and broadly shared views in the first place. If following this logic, we eventually arrive to the European social market model, highly desirable by European societies but definitely not sustainable in its current form.