How to Make Austerity Socially Sustainable

With the new proposed Treaty, German-style austerity becomes the constitutional norm in almost all the EU. This is a historic accomplishment and as such it must be welcomed. It strengthens the euro by making it virtually impossible to stray from fiscal rigor. However, this result could be insufficient and socially unsustainable, if it is not accompanied by other measures.
It's insufficient, because the eurozone is still an economic area which finds hard to weather asymmetric shocks and/or crisis at its periphery. Athens is an emblematic case. It cannot rely on European federal funds (the EU budget won't budge from 1% of GDP) or on macroeconomic adjustment (labor mobility is still hindered by cumbersome legislation and cultural resistance. Also, absent effective policies to kickstart growth (which the Italian government is currently considering), there is the risk of falling into austerity-recession-austerity vicious circle, which could turn out to be socially unsustainable, in the periphery as well as the core of the eurozone.
Greece was granted a second €130-billion loan, but Chancellor Merkel stated before the Bundestag that it's not warranted that this second injection German tax-payers' money will be enough to solve the Greek crisis. Merkel's fears could well turn into reality. In spite of the agreement forced onto private holders of Greek debt (who, at least on paper, have had to accept a 70% cut on nominal values), it remains to be seen whether the people of the country will be able to shoulder yet another round of austerity. Merkel and her party, the CDU, a priori exclude revising ECB's institutional mission or intruding Eurobonds as solutions to the crisis, but this could turn into a political boomerang for them. Anti-European feeling is being fueled by xenophobic populist parties across the EU, such as the PPV in Holland or Jobbik in Hungary. Avoiding the slide toward populism should be a top priority for EU governments, starting with Germany.

Thus, greater attention should be given to social sustainability within the unavoidable framework of austerity, while having the courage of strengthening the financial position of the euro, and explaining the advantages this has for EU citizens, especially the younger generations.