The Nobel Prize: “How does that ‘delicate balance’ feel in countries with 25% unemployment?”
“Europe is pursuing a fiscal austerity that is totally inappropriate in a still-depressed economy”
The new strategy of the European Union that at the watchwords “austerity” and “rigor” is now adding “growth and development” is not convincing at all Paul Krugman. According to the Nobel Prize for Economics, the Commission is “covering over the horror of the European situation with a blanket of soothing words ”. Criticizing the fact that the EU executive talks about wanting to reach a “delicate balance” between rigor and growth, from his blog on the New York Times, Krugman asks: “How does that “delicate balance” feel in countries with 15, 20, 25 percent unemployment?”.
The situation for Krugman is clear, the one chooseb by Brussels is “an economic strategy that, let’s not forget, has tipped Europe back into recession, and keeps pushing overall euro area unemployment to new highs. ”. Up to the Nobel laurate “Europe as a whole is pursuing a remarkable degree of fiscal austerity that is totally inappropriate in a still-depressed economy ”. An if this is not enough “much of that tightening comes from countries that have no choice about imposing at least some austerity”, but “the Commission should be urging those countries not suffering from a debt crisis to be engaged in offsetting expansion — not giving Germany a thumbs up when it has in fact been moving in the the wrong direction ”. The same is for Paris, Krugman writes: “The Commission should be pointing out just how bad an idea it is for France to be engaged in fiscal tightening because its economy is weaker than expected, which is exactly the reverse of prudent macro policy ”.
