If we are going to debate global austerity, let's at least involve all sides
The interesting question about the current global austerity is why it has happened. This profoundly important question is posed by the organisers of a conference - Debating Austerity - which begins this evening in Dublin and goes on all day tomorrow.
The conference programme makes the point that since the economic crisis began in 2008, the eurozone has had a choice about the degree to which the bloc could have stimulated the economy. But individually and collectively decisions have been taken not to do that.
Along with a fragmenting banking system - which starved the economy of credit, and the effects on confidence of fears that the euro itself would cease to exist - the tightening of budgetary policy across the eurozone is likely to have made the recession deeper and longer than it would otherwise have been. In my view, it was a mistake not to stimulate more in those countries with the borrowing capacity to do so, and collectively via the issuance of eurobonds.
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