Nobel laureate Joseph Stiglitz said Europe is “headed to a suicide” as euro-area leaders focus on austerity.
“There has never been any successful austerity program in any large country,” Stiglitz told reporters in Vienna.
“If Greece was the only part of Europe that was having austerity, we could ignore it, but if you have U.K., France, you know all the countries having austerity, it’s like a joint austerity and the economic consequences of that are going to be dire.”
“The problem is that with the euro, you’ve separated out the government from the central bank and the printing presses and you’ve created a big problem,” Stiglitz said, adding that “austerity combined with the constraints of the euro are a lethal combination.”
Stiglitz sees a core euro area of “one or two countries” as the “likely scenario if Europe maintains the austerity approach,” he said.
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