Austerity in the euro area: the sad state of economic policy in Germany and the EU

Achim Truger

European Journal of Economics and Economic Policies: Intervention, 2013, vol. 10, issue 2, 158-174

Abstract: The euro area is currently going through its worst period of recession and economic stagnation since the Great Depression and World War II. The article tries to give an impression of the extraordinary degree of fiscal austerity and the devastating economic effects it has already had and must be expected to have in the near future. In addition it is argued that both the lack of economic justification and the devastating consequences of the fiscal policies currently executed should have been absolutely obvious even from a mainstream perspective. Therefore the sad state of economic policies in the euro area is that it did not even follow moderate mainstream proposals but instead seemed to rely on radical and outdated theoretical or purely ideological foundations. Germany as the most economically and politically influential member state of the euro area seems to be most infected with such radical ideas.

Keywords: fiscal policy; Hamburg appeal; austerity; debt brake; fiscal compact; Germany; euro area (search for similar items in EconPapers)
JEL-codes: E61 E62 E64 E65 H62 H63 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (20)

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