Friday, May 25, 2012

The Crisis This Time

New York Times
Editorial
May 24, 2012


They blew it, again. With Greece in meltdown, raising fears of cascading bank insolvencies and deepening recession, Europe’s leaders failed again this week to agree on the ambitious initiatives needed to quell the crisis.

For a few days before their Wednesday dinner meeting, it sounded as if Chancellor Angela Merkel of Germany might be ready to change her all-austerity-all-the-time tune. France’s new president, François Hollande, had campaigned and won on a pro-growth agenda, and Ms. Merkel was suddenly suggesting that some stimulus for Greece and others to spur growth might be possible.

But, on Wednesday, she was again insisting on the same draconian budget cuts and the same unreachable targets as the price of aid to Greece and other indebted euro-zone nations.

By this point, there should be no debate: Austerity has been a failure, shrinking economies and making it ever harder for indebted countries to repay their debts.

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