"Eurozone Commission President Pleads With Europe To Continue Austerity"
Voters in Italy — while not giving any party firm control of their government — did deliver a rebuke to austerity during yesterday’s national elections. “This election, I think, is the logical consequence of pursuing policies that have dramatically worsened the economic and social picture in Italy,” Simon Tilford, the chief economist of the Center for European Reform, told the New York Times.
But Eurozone Commission President Jose Barroso (who holds the highest EU office) wants to make sure that other Europeans don’t get any ideas regarding ditching their own austerity programs following Italy’s results:
Speaking at a Reuters summit on the future of the euro zone, Barroso said efforts to revive Europe’s economy would take time and required determination. The fact Italian voters had turned Monti out of office did not mean his policies, or those advocated by the European Union, were wrong.
“I hope we are not going to follow the temptation to give in to populism because of the results in one specific member state,” Barroso, speaking with passion, said of the EU’s efforts to combat the sovereign debt crisis.
“The question we have to ask ourselves is the following: should we determine our policy, our economic policy, by short-term electoral considerations or by what has to be done to put Europe back on the path to sustainable growth? For me the answer is clear.” [...]
Barroso said it was incumbent on all EU and euro zone countries, especially those receiving aid from the bloc’s rescue funds, to retool their economies and cut deficits in an effort to improve competitiveness and stimulate growth.
Barrosso is far from the only EU official imploring countries to stay the course, despite the clear evidence that austerity is stifling economic growth in Europe while not delivering significant debt reductions, as these two charts from economists Paul De Grauwe and Yuemei Ji show:
As De Grauwe and Ji wrote, “As it becomes obvious that the austerity programs produce unnecessary sufferings especially for the millions of people who have been thrown into unemployment and poverty, resistance against these programs is likely to increase. A resistance that may lead millions of people to wish to be liberated from what they perceive to be shackles imposed by the euro.”