AltAusterity Digest #64 September 6-12, 2018

Greek prime minister Alexis Tsipras has pledged to raise wages, cut taxes, and increase welfare spending. Claiming that the Greek economy has now stabilized, Tsipras’ anti-austerity measures will include reducing a property levy for the most disadvantaged citizens, lowering VAT taxes and corporation tax rates, and reinstating collective bargaining. These measures come as Tsipras and his Syriza party are dipping in the polls. Despite running on an anti-austerity platform in 2015, Syriza implemented further austerity measures, in large part under the directorship of the European Commission, the International Monetary Fund and the European Central Bank.

The rating agency Standard and Poor’s (S&P) has downgraded seven Chinese local-government’s ratings on the view that local governments are less likely to provide bailout funds to companies tending towards default. In the state-owned corporate sector, investors often lend on the basis of government connections rather than credit fundamentals. While investments in public goods such as transport or sewage still have strong government support, the state’s competitive sectors are less likely to receive government bailouts.

A Huffington Post article discusses a study that links the 2008 economic collapse, austerity, and the rise of Sweden’s far right. The Swedish election on Sunday saw neither the right-bloc or left-bloc of political parties take a majority. The failure to form any majority is in part attributable to the Sweden Democrats – the rightwing, anti-immigrant, Eurosceptic party – taking 17.6% of the vote. The study discussed connects how Sweden’s shrinking welfare state and liberalized labour market have led to concerns around the distribution of limited state resources. These concerns have increasingly included anti-immigration sentiments from certain sections of the electorate.

As Hurricane Florence approaches landfall across the South Eastern United States, it has been found that the Trump administration transferred nearly $10 million away from the Federal Emergency Management Agency (FEMA) in cuts to training, IT security and infrastructure investments. The funds were instead redirected to Immigration and Customs Enforcement (ICE), which has been forcefully separating families at the U.S.-Mexico border and deporting undocumented residents. The transfer was initiated by the Department of Homeland Security, which told Congress that ICE needed an extra $200 million. An internal report released by FEMA earlier this year has acknowledged the failures of its disaster response to Hurricane Maria in Puerto Rico last year, citing understaffing as one of its key issues.

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