“There is no alternative” were Margaret Thatcher’s slogan during the first years as a British Prime Minister. She frequently repeated the phrase when she met resistance and were reminded about the cost of the reform policy changes.
When Margaret Thatcher got the position as the Prime Minister of United Kingdom in the spring of 1979, she acquired the responsibility for an economy in serious crisis. The administration of the state had grown too much, budgets were out of control, inflation was high, competitiveness miserable and the powerful unions acted destructively. It was obvious that the economic course in the UK in the 1970s was not sustainable and that drastic changes had to be implemented as soon as possible.
The only solution for Thatcher was to go strongly in for making changes. Union’s power was crushed after major strikes including the mining industry, Thatcher did not give away an inch. Extensive privatization of public enterprises was initiated while the taxes were lowered and the public sector decreased the size. She lowered direct taxes on income and increased indirect taxes. She increased interest rates to slow the growth of the money supply and thereby lower inflation, introduced cash limits on public spending, and reduced expenditure on social services such as education and housing. These changes were very controversial and created deep conflicts. The first years with changes did not give results. Unemployment rate remained high and government revenues fell. The painful changes did not seemed to work and made her very unpopular. As we have seen in recent days, she still creates discord even after her death.
First, around 1983, it became clear that the British economy was improving.
British economy was transformed from being the “sick man of Europe” in 1970 to be very dynamic and effective in the 1990s. The improved economic conditions of the early 80s are suggestive of the success of the Thatcherism reforms but obviously the causality link cannot be definitely established. Some learning’s from Thatcherism is that values must be created before they can be distributed. Further is it essential to build a community of profitable and competitive jobs, which actually gives welfare to distribute.
There was no alternative… For UK in the late 70’s it might be correct!
But for Southern Europe in 2013 it does not. The alternative is to reintroduce local currencies, devalue it, so it can quickly regain competitiveness and getting people into work.
Instead choose the politicians in the European Union to sacrifice young people in favor of the prestigious project with a common currency, €.