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"The impact of the austerity measures on growth remains a major concern," according to the paper. "The process of public deleveraging coincided with private sector deleveraging and has further intensified the crisis." After losing access to capital markets to raise money, several countries, notably Greece, took a knife to spending in return for bailouts from other eurozone countries and the IMF. Even Germany, the biggest contributor to the bailouts, has kept a lid on spending at a time when economists have argued it should have spent more to support economic activity across the eurozone. Simon O'Connor, the spokesman for Olli Rehn, the Commissioner responsible for monetary and economic matters who has taken a lead role in Europe's bailout strategy, insisted the report reflects the author's personal opinion. "All European economies have their specific challenges and that's why we've consistently advocated a differentiated approach to fiscal consolidation," O'Connor said.
[Associated
Press;
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