4

Transatlantic Strife

NEW YORK  A public spat has erupted between New York Times-columnist Paul Krugman and European Commission officials. For weeks Krugman has been heaping scorn on EU commissioner Olli Rehn, who is responsible for economic and monetary affairs, singling Mr Rehn out as the symbol of the eurozone’s – in his view misguided – austerity drive.

Not only did Mr Krugman assail commissioner Rehn for his claim that – thanks to the eurozone’s austerity measures – calm had been restored on financial markets, but also for his assertion that high government debt levels pose a significant drag on a country's economic growth, hindering economic recovery. Mr Krugman dismissed this as “cockroach ideas,” – “ideas that you try to flush away, but keep coming back,” even though Olli Rehn based his claim on research by Kenneth Rogoff and Carmen Reinhart, two renowned Harvard professors.