Abstract
The paper deals with some widely neglected, long-term consequences of the financial and sovereign debt crisis for the public sector. It indicates that there are no uniform answers because EU member states have been very unevenly affected. Various measures as parts of immediate austerity packages are categorized and criticized for their quantitative nature, incremental effects and short-term perspective. The focus is on long-term consequences of austerity measures such as quantity as well as quality of service provision, development of macro-economic variables, uneven distribution of curtailments not only between but also within countries and levels of government, and deteriorating employment relations. Unions have to react but are in a purely defensive position.
In comparative perspective the public sector in Germany has been hit but less seriously than a number of others; however, due to earlier severe retrenchment and consolidation measures it is part of a lean state. Established labor market institutions, such as social partners and institutionalized collective bargaining, continue to function despite changed conditions. There are, however, future risks, such as increasing fiscal pressure because of the implementation of national as well as European debt brakes.
Furthermore, there are far reaching, broader consequences of retrenchment measures not only for public sector employees but also for large groups of other citizens especially consumers because of limited access of various publicly provided services. Therefore, some political options and changing priorities are discussed. Reactions in general elections seem possible, the existing welfare state will continue to change.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
An additional factor leading to similar effects will be the further deterioration of promotion opportunities and career prospects, which formerly existed within the internal labor markets characterized by strict seniority rules and “promotion from within”.
- 2.
Spain constitutes a prominent example. Political differences as well as financial gaps between the federal level and the 17 autonomous regions prevent any kind of coordinated strategy to strictly limit new public debts.
- 3.
Germany definitely belongs to the third group of hybrid governance. Unilateral and bilateral legal forms have co-existed for many decades. In empirical terms, however, differentiated patterns of close interaction have developed over time (Keller 2010).
- 4.
In stark contrast to the present situation of “Germany’s jobs miracle” (Krugman 2009), the country was frequently called the “sick man of Europe” throughout the early/mid 2000s.
- 5.
We take this frequently used indicator, instead of private sector debt (household and non-financial corporate debt as a percentage of GDP), which is more relevant in some countries.
- 6.
In early 2011, the introduction of the so-called fiscal pact was concluded at the EU level. Violators of its stricter balanced budget rules can be sued by other member states. Critics argue vehemently that these measures will lead only to more expenditure cuts, contribute to the further retrenchment of the welfare state and finally result in a continued increase of social inequality.
References
Bach, S., & Bordogna, L. (2013). Reframing public service employment relations: The impact of economic crisis and the new EU economic governance. European Journal of Industrial Relations, 19(4), 279–294.
Bach, S., & Kessler, I. (2007). HRM and the new public management. In P. Boxall, J. Purcell, & M. Wright (Eds.), The Oxford handbook of human resource management (pp. 469–488). Oxford: Oxford University Press.
Bordogna, L. (2008). Moral hazard, transaction costs and the reform of public service employment relations. European Journal of Industrial Relations, 14(4), 381–400.
Crouch, C. (2011). The strange non-death of neoliberalism. Cambridge: Polity.
Deutsche Bundesbank. (2011, December). Monatsberichte 63.
Ellguth, P., & Kohaut, S. (2011). Der Staat als Arbeitgeber: Wie unterscheiden sich die Arbeitsbedingungen zwischen öffentlichem Sektor und der Privatwirtschaft? Industrielle Beziehungen, 18(1–2), 11–38.
European Commission. (2011). Industrial relations in Europe 2010. Luxembourg: European Commission.
European Commission. (2013). Industrial relations in Europe 2012. Luxembourg: European Commission.
Glassner, V. (2010, July). The public sector in the crisis (ETUI Working Paper). Brussels.
Glassner, V., & Watt, A. (2010). Cutting wages and employment in the public sector: Smarter fiscal consolidation strategies needed. Intereconomics, 45(4), 212–219.
ILO. (2012a). World of work report 2012: Better jobs for a better economy. Geneva: ILO.
ILO. (2012b). Euro zone job crisis: Trends and policy responses. http://www.ilo.org/global/research/publications/WCMS_184965/lang--en/index.htm
Ioannou, C. A. (2013). Greek public service employment relations: A Gordian knot in the era of sovereign default. European Journal of Industrial Relations, 19(4), 295–308.
Kalleberg, A. (2009). 2008 presidential address. Precarious work, insecure workers: Employment relations in transition. American Sociological Review, 74(1), 1–22.
Keller, B. (2010). Arbeitspolitik im öffentlichen Dienst. Ein Überblick über Arbeitsmärkte und Arbeitsbeziehungen. Berlin: Sigma.
Krugman, P. (2009, November 12). Free to lose. The New York Times, p. A31.
Lodge, M., & Hood, C. (2012). Into an age of multiple austerities? Public management and public service bargains across OECD countries. Governance, 25(1), 79–101.
OECD. (2011). Government at a glance 2011. http://www.oecd.org/gov/indicators/govataglance
OECD. (2012). Public sector compensation in times of austerity. Paris: OECD.
Rosseau, D. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Thousand Oaks, CA: Sage.
Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung. (2011). Verantwortung für Europa wahrnehmen, Jahresgutachten 2011/12. Wiesbaden: Statistisches Bundesamt.
Traxler, F., Blaschke, S., & Kittel, B. (2001). National labor relations in internationalized markets: A comparative analysis of institutions, change and performance. Oxford: Oxford University Press.
Vandaele, K. (2011, May). Sustaining or abandoning ‘social peace’: Strike developments and trends in Europe since the 1990s (ETUI Working Paper). Brussels.
Vaughan-Whitehead, D. (2012). Public sector shock in Europe: Between structural reforms and quantitative adjustment. In D. Vaughan-Whitehead (Ed.), Public sector adjustments in Europe: Scope, effects and policy issues (pp. 1–22). Geneva: ILO.
Vesper, S. (2012). Finanzpolitische Entwicklungstendenzen und Perspektiven des Öffentlichen Dienstes in Deutschland. Berlin: Hans-Böckler-Stiftung.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Keller, B. (2015). The Public Sector in the Aftermath of the Financial and Debt Crisis: Long-Term, Neglected Consequences. In: Schneider, V., Eberlein, B. (eds) Complex Democracy. Springer, Cham. https://doi.org/10.1007/978-3-319-15850-1_12
Download citation
DOI: https://doi.org/10.1007/978-3-319-15850-1_12
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-15849-5
Online ISBN: 978-3-319-15850-1
eBook Packages: Humanities, Social Sciences and LawPolitical Science and International Studies (R0)