From an
article co-authored by Peter Bofinger,
Overspending by governments, we have been told, triggered this crisis. The cure thus lies in immediate austerity, hence last month's German-led push for a eurozone fiscal compact and the UK's pursuit of similar policies.
But, as demonstrated by the experiences of Greece, Portugal and Spain, this course leads to biting, deep recessions and worsens public indebtedness. The IMF acknowledged as much last week. A focus on growth, not austerity, is the correct answer for Europe's ills.
This is a departure from his previously
stated position
The tough stance against Greece is the only correct approach. A cash injection from Brussels would have set a dangerous precedent -- it would have signaled to other problem countries like Portugal or Spain that when the going gets tough, the European Union will rescue them
According to Spiegel Bofinger is a member of the
government-appointed German Council of Economic Experts known colloquially here as the "Five Wise Men". This
council advises the German Govt on economic policy.
