April has been a bad month for the proponents of austerity. Did we really have to wait till April 2013 for the Government and troika to wake up and realise that severe austerity ultimately curtails growth?
- Early in the month, Ashoka Mody, the IMF's former mission chief to Ireland, stated that reliance on austerity for Ireland was counterproductive and that failure to tackle Irish bank bondholders was a mistake.
- In midmonth, an academic paper by two eminent US economists Reinhar and Rogoff used to justify austerity measures was found to contain fundamental errors which undermined their proposition that high governmental borrowings (as in Ireland) are necessarily connected to minimal economic growth.
- On the eve of last weekend's G20 meeting in Washington, EU commissioner Olli Rehn indicated that the euro zone will slow its budgetary belt-tightening because the troika's austerity programmes were having a greater-than-expected impact on growth.
- On Monday the president of the European Commisssion conceded that austerity wasn't a sustainable policy in the absence of social and political support
Published in Irish Times Readers Comments on 4th May 2013.
