Europe’s Austerity Mirage

By Jean-Paul Fitoussi – THE way the Greeks and their government have been treated tells us a great deal about the way Europe is structured and the dangers that beset it. The technocratic leaders of Greece have lost the confidence of the people, who are rioting because the conditions attached to help from the rest of Europe are so stringent that Greece would be better off in the future without such “assistance.”

This is unfortunate because Europe has much better policy options. The crisis in Europe is more the consequence of an unbalanced Constitution than of an economic problem. In a nutshell, in Europe national debts are the responsibility of member nations, but the common currency is without a sovereign. more>


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