COVID-19: a prelude to a revaluation of the public sector?

One of the striking features of the COVID crisis is the enormous expenditure that various EU governments have been pumping into their economies to keep troubled companies and the selfemployed afloat, to safeguard jobs and to invest in recovery programmes. This massive public spending stands in stark contrast to the years of austerity preceding the pandemic. There are some parallels with the previous economic crisis – the financial crisis – which started in 2008. At that time, governments saved the financial sector with unprecedented monetary injections, contradicting the austerity approach prevailing in the years running up to the crisis. There were widespread expectations that the financial crisis would lead to the demise of the neoliberal-monetarist paradigm in which austerity played a core part. But these expectations were not realised. The financial crisis was soon redefined as a ‘public debt crisis’ and to a considerable extent the public sector was called upon to foot the bill, in the form of further rounds of severe austerity. Will this time be different? Will the public sector pay the price again in the coming years for the debts governments are currently incurring? It is generally acknowledged that the public sector plays an essential role in combating and getting us through the COVID crisis, although assessments of the extent to which public sectors have managed this vary across countries. This applies first of all to public health care, but other public services, too – ranging from education to rubbish collection – that are considered vital or essential for getting through or overcoming the COVID crisis. Will this crisis usher in a new era in which the public sector will be valued just as much as the private sector or even assume priority? Or will the old mantra that the public sector is a ‘burden’ on the economy take precedence again when the health crisis is over, ushering in a new period of harsh austerity measures aimed at the public sector and its workers? In this contribution we first briefly look back at the consequences of the previous crisis for the public sector and then we put forward three arguments why this time it might – or should – indeed be different.