Recovery, Interrupted
With the exception of the US, G-7 leaders have pushed since mid-2010 for fiscal consolidation, overturning their earlier recovery efforts and urging austerity, despite the weakness of the recovery. But the logic of fiscal consolidation requires economies that have not recovered strongly to continue their efforts to stimulate growth.
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NEW YORK – Since the 2008-2009 slump lifted in mid-2009 – and especially following the exposure of the massive public-debt problems in Greece, Ireland, and elsewhere in Europe – most G-7 governments have reversed their earlier counter-recessionary positions. With the important exception of the United States, G-7 leaders have been pushing since mid-2010 for urgent fiscal consolidation, effectively overturning their earlier recovery efforts, and urging austerity measures to balance their budgets, despite the weakness, unevenness, and uncertainty of the economic upturn.