Austerity According to St. Augustine
The key to the Europe's debt problems lies in St. Augustine’s plea: “Grant me chastity and continence, but not yet.” Up-front gradualism must be the name of the game – and adjustment must be wedded to a growth strategy.
SANTIAGO – The guardians of austerity in Europe are striking back. Their emerging narrative goes like this:
When some economists spoke of panic and confidence crises, they meant their own. Bailout funds and Eurobonds were an invitation to moral hazard. Throwing money at the problem turned out to be unnecessary. Europe’s problem was an old-fashioned one: too much spending. Now that technocrats have replaced populists in the eurozone’s Mediterranean members, sustained fiscal austerity will get us out of trouble.
Sounds good, right? If only it were true.
SANTIAGO – The guardians of austerity in Europe are striking back. Their emerging narrative goes like this:
When some economists spoke of panic and confidence crises, they meant their own. Bailout funds and Eurobonds were an invitation to moral hazard. Throwing money at the problem turned out to be unnecessary. Europe’s problem was an old-fashioned one: too much spending. Now that technocrats have replaced populists in the eurozone’s Mediterranean members, sustained fiscal austerity will get us out of trouble.
Sounds good, right? If only it were true.