Another ‘Lost Decade’? Crisis and Structural Adjustment in Europe and Latin America

With the recent economic crisis, conditional lending and mandatory structural reforms arrived in the European Union. Greece and a number of other crisis countries were subjected to a rigorous process of economic adjustment in exchange for emergency credits from the troika (European Commission, European Central Bank, and International Monetary Fund). Conditionality and structural adjustment were first tested in Latin America. This article compares the European adjustment programmes with the structural reforms introduced in Latin American countries several decades earlier. By doing so, the article reveals strong parallels in spite of the fact that the initial adjustment programmes are rarely considered a success story and that the neoliberal ideology which inspired the related reforms is widely made responsible for the recent crisis. The fact that there are differences in the adjustment programmes is not the result of a re-think of the neoliberal agenda, but of the specific dynamics of European integration and of pragmatic responses to financial threats. However, the article also shows parallels in the outcome of structural adjustment. Some European crisis countries face a ‘lost decade’ quite similar to the one experienced in Latin America in the 1980s.