So, is the state complicit? Yes. Did the state cause these problems? No. Not unless we are willing to say that in Italy the level of family fertility is a fiscal responsibility and thus the state’s problem. In the Portuguese case, while demographics and low productivity play their parts, Portuguese net debt to GDP in 2000 was 52 percent and in 2007, 66 percent, which is hardly evidence of a spending splurge. Rather, in both cases, what was once seen as sustainable suddenly became seen as unsustainable once the possibility of a contagion-led fire sale through the European bond markets was factored into a slow-moving growth crisis. As usual, it’s the perception of risk that matters. And again, just as we saw in the US case, there was no orgy of government spending behind all this. Why, then, keep up the fiction that the bond market crisis is a crisis of spendthrift governments?

Mark Blyth, Austerity, loc. 199