Europe's problems are not casued by austerity. They are caused by the single currency and bad government spending / borrowing prior to the sub-prime crisis....
They are caused by the single currency and bad government spending / borrowing prior to the sub-prime crisis.I rather think it was caused by clueless people who set up the Euro system in the first place! At a macro level let me remind you all that economies do not operate like household budgets. Believing this is a Fallacy of Composition or Expectation. Both government and non-government sectors always run deficits and both sectors work together as an interdependent unit to create the money to enable economic growth.
There was austerity (for the lower echelons of the food chain) in place before the sub-prime crisis which was caused by creative accountancy in corporates which included the new banks. It was achieved by hiding credit (and inflation) through exaggerated asset description. Austerity has been applied not to correct the wrongs but to protect those who committed the fraud. That governments largely contain vested interests all over Europe should lead you to the unmistakable fact that our countries have the wrong leaders leading the wrong ruling classes.
How big does the unemployed and underemployed scapheap have to be before we call a halt to this nonsense?
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Ms Lagarde said Athens must improve tax revenue collection and liberalise entry into some professions to push the economy towards growth. Last week the IMF cleared the path to disburse a €1.7bn (£1.45bn) loan tranche to Athens after its latest review.
Asked whether she subscribed to Prime Minister Antonis Samaras's notion that Greece is now a "success story", Ms Lagarde said: "I certainly hope it's on its way to being a success story."
"There are some really positive developments but obviously more needs to be done," she told state NET television.
"There has been significant improvement with a programme that is now pretty much on track. The programme has seen massive, unprecedented consolidation, which is hard."
Latvia is ready to become the 18th country to join the eurozone, the EU's Economic Affairs Commissioner, Olli Rehn, has announced.
In a statement in Brussels on 5 June 2013 he said: "Latvia's desire to adopt the euro is a sign of confidence in our common currency and further evidence that those who predicted the disintegration of the euro area were wrong."
The country formally submitted its application in March, and its economic situation has been scrutinised by Commission officials in the intervening months.
Despite being the first EU country to ask for assistance from the EU and the International Monetary Fund in 2009, Latvia now has the EU's highest GDP growth rate and second-highest export rate.
Mr Rehn said that the country's experience was a sign that "a country can successfully overcome macroeconomic imbalances, however severe, and emerge stronger".
The report carried out by the Commission into the state of the Latvian economy found that its interest and inflation rates were well below the EU average, and that the deficit-to-GDP ratio had fallen from 8.1% in 2010 to 1.2% in 2012.
Joining the eurozone will mean that Latvia will also have to join a number of institutions created in the wake of the eurozone crisis, such as the European Banking Authority and the Single Supervisory Mechanism.
Following the Commission's recommendation a final decision will be granted by the Economic and Financial Affairs Council in July, subject to a positive opinion from the European Parliament.
It is expected that Latvia will join the single currency on 1 January 2014.
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