The Worst and the Best of Austerity
Austerity is the only option for eurozone countries that no longer have access to capital markets. But, for others, nibbling at the edges of a deficit in the current crisis is at best a sideshow, and at worst a recipe for recession at a time when all signs point to an economic downturn.
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BRUSSELS – In June, it was Greece. In August, it was France, Italy, Spain, and Portugal. In September, it was Greece again – and Spain. In November, France took another turn, before Italy again in December, this time in a major way. Every month, despite an ever-darker outlook for economic growth, countries announce new spending cuts and tax hikes in the hope of restoring confidence in the bond markets. Only Germany stands out, having recently announced a tax cut, albeit a modest one.