Austerity measures are leading Europe on a disastrous path, Nobel-prize winning economist Joseph Stiglitz told a panel discussion in Vienna today.”I think Europe is headed to a suicide,” he said, according to a Reuters article. “Decreasing growth is causing the deficit, not the other way around. I think that austerity approach is going to lead to high levels of unemployment that will be politically unacceptable and make deficits get worse.”
His comments echo economists’ recent shift against austerity and towards policies that promote growth. Many opined that support for French presidential candidate Francois Hollande—a Socialist who says he would renegotiate the European fiscal compact and pursue changes to the mandate of the European Central Bank—is indicative of a larger political shift.
“What they have agreed to do last December is a recipe to make sure that (the eurozone) dies as we know it,” Stiglitz told the panel, as broadcast by an Austrian radio station. He noted that a monetary union composed solely of stronger Northern European countries could probably survive, however.