Europe may end its painful embrace of austerity

As Europe has grappled with the trauma of a devastating financial and economic crisis, policy makers have consistently relied on one approach to managing the damage - budget austerity.

Shrink government spending by trimming pensions and cutting social programs, the logic runs, and the markets will gain confidence in the tough-minded people in charge. Confident markets make for happy markets. Money will pour in, and good times will roll.

Even as prosperity has remained painfully elusive across much of Europe, leaders have time and again renewed their faith in the virtues of this harsh medicine. Until now.

Some policy makers are flashing tentative signs that they may be prepared to slacken their grip on public coffers to spur growth and improve the lot of ordinary people suffering joblessness and diminished wealth. In a sign of this shift, the heavily indebted Italy is increasingly inclined to challenge Germany to loosen European purse strings.

The development comes after Britain's stunning vote to abandon the European Union, an angry rebuke of the economic elite within struggling communities, and as populist, anti-immigrant movements across the Continent gain traction.

Above all, the change could be an antidote to years of dogmatic European policies, replacing a failed effort to generate economic growth through cutting spending with a focus on bolstering investment.

"Austerity is out of the discussion in a way," said the Italian finance minister, Pier Carlo Padoan, during a recent interview in Rome. "We need to bring more growth and more jobs to Europe." The most obvious place the new dynamic is unfolding is in Britain.

Before the June 23 vote for "Brexit," the man in charge of the budget, the chancellor of the Exchequer, George Osborne, was publicly pursuing the aim of delivering a budget surplus by 2020.

© 2016 The New York Times News Service