Taking into account the Social Dimension while applying the Fiscal Austerity Measures in Egypt (A comparative study)

Abstract

Austerity measures are "The policies that aim to reduce the budget deficit in a country during a specific period of time". It includes a mix of lower public expenditures and increase taxes; but the procedures which were followed vary from a country to another according to its economic, social and political circumstances. In this regard, the circumstances of each country should be the main engine for policymakers, since neglecting any aspect may lead in the future to severe economic and social consequences. For Greece, the "Troika" policies ignored some institutional and structural aspects of the Greek economy, and since most of these policies depend on a single model that suits all economies, they focused mainly on macroeconomics such as debt repayment and budget deficits and ignored examination of social factors; As Greece's stringent austerity measures harmed many social aspects, which means that citizens bear the costs of the governmental policies. Where, after 8 years of implementing austerity policies, the position of the Greek economy in the rankings does not seem to have improved significantly. Furthermore, the case of Greece proves that, despite the persistent austerity packages dictated by international lenders, the repayment of high public debt is not possible at the current time. Thus, its rapid debt will remain a burden on economic growth for the next several decades. The main purpose of this research is to highlight the successes and failures of the Greek experience; and analyzing the policies followed in order to reach the optimal austerity and reform policies that suit the Egyptian economy by extracting positive and negative lessons from those policies.