the crisis was initially placed at the door of excessive lending in the US mortgage market in the years up to 2007, the breadth, depth and speed of financial contagion quickly revealed that since the deregulatory wave of the late 1980s and 1990s, European finance was deeply implicated. The sovereign debt crisis brought forward another comfortingly external scapegoat, namely the bond markets, but that agency - especially in the form of the withdrawal of US money market funds from the short-term funding of European banks - demanded precisely the reallocation of blame towards the working classes of the Eurozone, i.e. austerity policies and the protection of creditor rights rather than workers’ living standards. Faced with this choice, the political élites crisis’,10 have made no bones about it: applying the maxim of ‘never waste a they are pursuing the opportunity to effect a major reduction in the relative wealth and power of working people. In a Kaleckian framework, therefore, austerity policies serve the interests of capital as against labour; they are an instrument of class war (Radice 2011).

The mechanism of depoliticisation - in the current case of the EU Fiscal Pact, the imposition of a fixed and legally-binding limit to the structural deficit - serves to legitimise what is a fundamentally political choice. This legitimation strategy makes use of a range of common- sense public understandings (or misunderstanding): universally, the fear of suffering the same fate as the Greeks, the fear of loss of ‘national competitiveness’ in world markets, the persistent belief that the public debt is no different from the debt of individual households and businesses. On top of this, there are further elements according to national circumstances: in Germany, the historical fear of inflation; in Britain, the wider Europhobia constantly stirred up by the leading press barons; in France, the fear of specifically German competitiveness; and so on.

However, the Achilles heel of the depoliticisation strategy is that it rests on the view that matters of economic policy are far too complex to be left to politicians, and that ‘the experts’ are politically neutral, using their objective knowledge to serve the public interest. It is abundantly clear that the experts currently in charge advance a strategy that serves a particular special interest, that of capital in the guise of ‘investors’. In this context, the opponents of austerity must insist that the democratic rights of citizens to determine state policy trumps the market rights of private property, thereby revealing the fundamental flaw in our present political order.

## 4. Conclusions

Until the 2008-9 financial crisis, the strategy of depoliticisation was remarkably successful in reshaping the permitted limits of economic policymaking. The breach of those limits during the bank rescues, and the accompanying fiscal stimuli aimed at restoring output and growth, signalled above all to the ruling classes the possible threat of a ‘repoliticisation’ of economic policy-making. Such a threat appears to be signalled by increasing public discontent with the failure of the present EU régime to deal effectively with the Eurozone crisis. In this light, the 2011 Fiscal Pact proposal, and specifically the clause concerning the use of the structural deficit as a binding target, indicates that the present political élites have no intention of allowing such a strategic shift.

In this paper I have sought first to challenge the apparent objectivity of the statistical construction of measures of the structural deficit. It turns out that this depends upon the measurement of the gap between present and potential output, and that this measurement is either unreliable because it relies on mechanical assumptions about economic behaviour that are not realistic (the statistical filter and production function methods), or alternatively on subjective