Historically, major economic crises have also always been turning points for policy paradigms. Crises were moments for critical choices, when established paradigms collapsed, and alternatives were tested. In this respect, the Great Recession seems to differ. A growing literature tries to grapple with the surprising resilience of neoliberalism even after its spectacular failure as manifested in the financial crisis. My talk seeks to contribute to the debate on economic crisis, policy change, and the resilience of neoliberalism by comparing the policy responses of a selected group of peripheral European countries (East and West). Looking at recent reforms targeting indebted house owners and the housing regime, as well as the financial sector, I identify three policy responses to the Great Recession. Some countries (Ireland and Estonia) have embraced neoliberalism either enthusiastically or at least without much debate, while others have also by and large stuck to the neoliberal policy paradigm, but only reluctantly (Spain and Slovenia). A third group of countries has rejected neoliberal solutions (Iceland and Hungary). I will give evidence of the different policy responses, explain how they came about, and analyze their repercussions beyond the periphery.
Dorothee Bohle is Professor of Political Science at the Central European University of Budapest. She has published widely on the political economy of Central and Eastern Europe. Her recent book (co-authored with Béla Greskovits) Capitalist Diversity on Europe’s Periphery was published in 2012 by Cornell University Press.