Has Austerity Failed in Europe?
If the purpose of austerity in Europe was to reduce public-debt levels, its critics are right: fiscal belt-tightening has clearly failed, because debt/GDP ratios continue to rise. But the goal of austerity was not just to stabilize debt ratios.
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BRUSSELS – Although many European governments have announced expenditure cuts and tax hikes, their debt/GDP ratios continue to deteriorate. So, if the purpose of austerity was to reduce debt levels, its critics are right: fiscal belt-tightening has failed. But the goal of austerity was not just to stabilize debt ratios.