Austerity in Europe
The Economist
notes –
“Portugal, Ireland,
Italy, Greece and Spain—the PIIGS, as investment bankers’ shorthand has it—were
in the direst fiscal straits in the crisis and, naturally, have been the most
austere since. Italy has reduced its underlying primary deficit by 4.7% of GDP;
the others, by more than 8% of GDP. These figures are huge: 8% of GDP is
equivalent to average government spending on pensions in the OECD. No one
should accuse the Greek government, in particular, of not cutting back enough:
the figures reveal tightening of a whopping 17.2% of underlying GDP between
2009 and 2015. At the other end of the scale, Germany has barely had to cut
back at all, and in fact the OECD expects it to loosen its purse-strings
slightly this year. No wonder the PIIGS have squealed.”
Related – Fiscal Adjustments:
https://www.imf.org/external/pubs/ft/wp/2014/wp14179.pdf