Are You an Austerian or a Spendanigan?

Olli Rehn
JOHN THYS | AFP | Getty Images
Olli Rehn

Since the financial crash five years ago, the economic world can clearly be separated into two factions: those favoring austerity to promote growth and those preferring increased state spending to stimulate the economy. For Olli Rehn, the vice president of the European Commission, this is a modern-day war between "austerians" and "spendanigans."

Despite the New York Times' announcement to review all of its blogs and shut down some – forcing the New Republic to pen an article entitled "Eulogy for the Blog" – Rehn has only just set up his first one.

In his opening post, Rehn refuses to fall into either the austerian or spendanigan camps. "As a doctrinaire agnostic," he states, "I refuse to take an oath to either of these, as there is no silver bullet or single issue movement that can solve the present crisis and return Europe to a sustained recovery."

Whether austerity is the correct path, particularly in Europe, has become increasingly debated in the wake of poor growth and disgruntled populations.

(Read More: Europe's Austerity Era Could Be Coming to an End)

France was the first country to embrace an anti-austerity candidate when voters ousted Nicholas Sarkozy in favor of socialist leader Francois Hollande. More recently,Icelandic voters, frustrated by austerity measures and falling living standards, voted in center-right parties opposed to such measures. These parties are also against joining the EU, a body now frequently seen as enforcing austerity upon the euro zone member states.

Portugal and Ireland have already secured more time to reduce their deficits, and Greece and Spain are similarly requesting adjustments over deficit reduction and loan repayment.

(Read More: EU Offers Crisis-Hit Members Wiggle Room on Deficits)

Even a candidate for Angela Merkel's job as Chancellor in Germany has hinted at less austerity. Ahead of elections at the end of the year, Peer Steinbrueck, a former German finance minister currently heading the Social Democratic party, told CNBC he would change the austerity measures imposed on Europe.

The U.K.'s slow growth saw the IMF's Christine Lagarde suggest that the country should seek alternative measures to its austerity drive: "We have said that should growth abate, should growth be particularly low, then there should be consideration to adjusting by way of slowing the pace. This is nothing new. And this is still the position and one that has been very clearly articulated within the various departments."

(Read More: Despite Uptick, UK Austerity Isn't Working)

In the light of this apparent backtrack from austerity, Rehn has some answers. His blog contends that the trend towards weakening austerity and a focus on growth has been part of the long-term plan for Europe since the start: "we have insisted that structural reforms to enhance sustainable growth and job creation are at least as important as a sound fiscal policy," he says.

What spendanigans may call a return to Keynesian economics, Rehn calls a slow-down of fiscal consolidation, as the continent has now become financially secure to path the way towards structural growth and job creation.

Rehn argues that austerity measures are becoming more lax because many doubts have been erased. "This slowing down of the pace of fiscal consolidation in the EU has been made possible by three factors," Rehn contends.

"First,by the increased credibility of fiscal policy which the euro area member states have achieved since 2011; second, by the decisive action the ECB has taken to stabilize the markets; and third, by the reform of EU economic governance."

Of course, Rehn differs from those wanting to wave goodbye to austerity for good, he calls for Europeans to stay the course outlined by the European Commission,so that Europe's slow path to recovery is not brought crashing down.

Rehn is not an austerian nor a spendanigan; he's somewhere in between: a spenderian.