Has austerity gone too far?

Debate Moderator(s): Giancarlo Corsetti

Europe has embraced austerity but financial markets still worry about debt sustainability – at least in part due to slow growth that has been associated with fiscal belt-tightening. Is austerity self-defeating? Is it keeping Europeans underemployed for years and thus destroying the medium-run growth needed to pay off the debt? Or are the belt-tighteners wisely steering their nations clear of Greek-like tragedies? The questions for debate are simple: * Should governments let up on austerity now that the global economy is weak but credibility on fiscal sustainability is far from granted? * And under what circumstances would be wise to do so?