ABSTRACT
This chapter examines how most European economies coped with the international economic downturn. It explores how from stimulus plans announced between late 2008 and early 2009, European governments shifted to more cautious intervention to put in place exit strategies from high spending levels. The chapter reviews the economic analysis, which has thus far assessed the impact of public spending on different countries income. It articulates an evaluative framework to assess newly introduced fiscal policies in a changed economic paradigm, going beyond the traditional dichotomy between Keynesian and liberal perspectives. Most economic anti-crisis policies in Europe adopted tax spending, as opposed to the traditional intervention through public expenditure and regulation. The chapter articulates an evaluative framework in light of the cultural, economic, and political evolution, which has occurred in parallel with the changed role of the state within the economy. The concrete application of both the Keynesian and neoliberal paradigms was characterized by inconsistencies and overlapping.
