The last chance to rescue the euro

Commentary feature. Austerity policies designed to sustain credibility have begun to have the opposite effect.

The central point – blindingly obvious but lost to the cacophony – is that what matters is the mix and sequencing of policy choices. Deficit-reduction depends on growth, but growth is sustainable only in the context of preprogrammed fiscal discipline. Thinking in terms of binary choices is self-defeating: when the discussion turns to Keynes versus Hayek, the game is lost.

ESO: Background information: Find other Commentary Features in ESO on Challenges facing EMU http://www.europeansources.info/advSearchLink?keyword=commentary%20feature%20emu%20challenges%20&searchOption=all

ESO: Background information: European growth initiative slowly takes shape http://www.europeansources.info/record/european-growth-initiative-slowly-takes-shape/

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