Publication

This working paper argues for the immediate restoring of growth policies in Europe, and discusses the role of the EU budget as an instrument for setting and implementing a real EU growth strategy. The crisis is having an extremely severe impact on the real economy, which is felt most acutely in the southern Eurozone member states. Since the end of the deepest phase of the crisis in 2009, European governments have committed themselves to fiscal consolidation. The results of these policies have been perverse: the impact of fiscal tightening during a depression may result in depressed output and high unemployment, without lowering debt-GDP ratios.