Stiglitz Says Europe Made Wrong Bet With Austerity

By Edith Balazs - Sep 7, 2010

European governments made a “wrong bet” by pushing for austerity after the global recession, resulting in slower economic growth for the region and the U.S., Nobel Prize-winning economist Joseph Stiglitz said.

“Europe has made a wrong bet with austerity,” Stiglitz, 67, told reporters today in Budapest. If Germany, the U.K. and France remain committed to budget cutting, “that will have systemic consequences for the entire Europe.”

Europe’s economy is at risk of sliding back into recession as governments reduce spending to rein in budget deficits, Stiglitz, a former chief economist at the World Bank and now a professor of economics at Columbia University in New York, said in an interview with Dublin-based RTE Radio on Aug. 24.