Former Treasury Secretary & Harvard-based charmer Larry Summers explains why austerity schemes give him a headache - read his entire piece at the
Financial Times HERE:
Unfortunately,
Europe has misdiagnosed its problems and set the wrong strategic
course. Outside Greece, which represents only 2 per cent of the
eurozone, profligacy is not the root cause of problems. Spain and
Ireland stood out for their low ratios of debt to gross domestic product
five years ago with ratios well below Germany. Italy had a high debt
ratio but a very favourable deficit position. Europe’s problem countries
are in trouble because the financial crisis under way since 2008 has
damaged their financial systems and led to a collapse in growth. High
deficits are much more a symptom than a cause of their problems.
Treating symptoms rather than causes is usually a good way to make a
patient worse. So it is in Europe. Its financial problems stem from lack
of growth...
