Europe’s austerity drive suicidal, says Joseph Stiglitz

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Summary“I think Europe is headed to a suicide...There has never been any successful austerity program in any large country,” the former World Bank economist told a panel discussion in Vienna.

Europe’s attempt to save its way back to health is tantamount to economic suicide that could wreck the euro currency block, Nobel Prize-winning US economist Joseph Stiglitz said, calling for the continent to focus instead on fostering growth.

“I think Europe is headed to a suicide...There has never been any successful austerity program in any large country,” the former World Bank economist told a panel discussion in Vienna.

“I think that austerity approach is going to lead to high levels of unemployment that will be politically unacceptable and make deficits get worse,” Stiglitz said. He urged rich European countries like Germany to invest more in infrastructure, education and technology, arguing that “the returns on those investments are an order of magnitude greater than the cost of capital”.

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