Austerity is not the answer
Wednesday May 30 | Google +Add to Calendar >
The live debate took take place on Weds 30th May. Continue the debate on Google+.
You borrowed money you can’t pay back; no one’s willing to lend to you any more…it seems pretty obvious what you should do: reduce your spending to match your income, foster a reputation for good credit, and start borrowing and investing when your current troubles are over. If you don’t do that, the cost of borrowing will skyrocket and you will fall further into debt. That’s no doubt what Angela Merkel will be telling François Hollande and any passing Greek politician. Countries like Portugal, Italy, Greece and Spain – the Pigs – have just been living high on the hog for too long. A home truth that cannot be sidestepped. Face reality.
Truth? Or madness? French president François Hollande is not the only one who thinks that putting on the hair shirt is a form of suicide – it will simply kill the already fragile patient. Austerity is self-defeating, argue the expansionists: look at Greece. The more its economy shrinks, the more it needs to borrow just to keep the patient on life support. Besides, those who urge austerity should face political reality: push a democracy like Greece too far and it will just say “No!”, default, exit, devalue and go it alone. Argentina did it after all, and lived to tell the tale. Is that what the austerity-mongers really want – to see Europe splinter apart for lack of a trillion euros or so?
Should we end austerity to save Europe? Or save Europe with lashings of tough love? Have your say at the second in our series of Versus debates with Google. If you want the inside track on the latest developments in the eurozone, join us on YouTube or Google+ for this online-only event as our advocates grill expert witnesses in our new courtroom format.
Jemima Khan – Associate editor of the New Statesman and European editor-at-large for Vanity Fair
Emily Maitlis – Newsnight presenter
Advocate for the motion
Oliver Kamm – Leader writer & columnist for The Times
Advocate against the motion
Martin Vander Weyer – Business Editor, The Spectator
Erik Berglöf – Chief Economist and Special Adviser to the President at the European Bank for Reconstruction and Development
Julian Callow – Banker and Euro Economist
Guillermo de la Dehesa – Chairman of the Centre for Economic Policy Research (CEPR) in London
Ian Goldin – Director, Oxford Martin School, University of Oxford
Erik Jones – Director of European Studies at the Paul H. Nitze School of Advanced International Studies
Anton La Guardia – Author of The Economist’s Charlemagne column
Matthew Lynn – Founder of Strategy Economics, a London-based consultancy
George Papaconstantinou – Greek statesman and former Minister of Finance (2009-2011)
Yanis Varoufakis – Professor of Economic Theory at the University of Athens