The Divergence in Economic Policy Preferences: How North-South Divides Challenge European Integration

Abstract: This study aims to analyze the economic policy differences between Northern and Southern European countries in the process of European integration, particularly focusing on fiscal policies and austerity measures during the European debt crisis. Northern European countries are generally characterized by high welfare, high taxation, and strict fiscal discipline, whereas Southern European countries face challenges such as unequal welfare systems and weak industrial bases. These differences stem from historical, cultural, and economic structural factors, which became especially pronounced during the response to the debt crisis. Northern European countries advocate austerity measures to restore economic stability, while Southern European countries argue that these policies exacerbate economic recession and social unrest. This paper explores how these policy differences challenge the EU's decision-making processes, member state relations, and the broader process of European integration. It also points out that addressing these divisions while maintaining the course of European integration to strengthen economic cohesion within the EU is a key challenge for the Union.