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Showing Original Post only (View all)Joseph Stiglitz to Greece’s Creditors: Abandon Austerity Or Face Global Fallout [View all]
A few years ago, when Greece was still at the start of its slide into an economic depression, the Nobel prize-winning economist Joseph Stiglitz remembers discussing the crisis with Greek officials. What they wanted was a stimulus package to boost growth and create jobs, and Stiglitz, who had just produced an influential report for the United Nations on how to deal with the global financial crisis, agreed that this would be the best way forward. Instead, Greeces foreign creditors imposed a strict program of austerity. The Greek economy has shrunk by about 25% since 2010. The cost-cutting was an enormous mistake, Stiglitz says, and its time for the creditors to admit it.
They have criminal responsibility, he says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. Its a kind of criminal responsibility for causing a major recession, Stiglitz tells TIME in a phone interview.
Along with a growing number of the worlds most influential economists, Stiglitz has begun to urge the troika to forgive Greeces debt estimated to be worth close to $300 billion in bailouts and to offer the stimulus money that two successive Greek governments have been requesting.
Failure to do so, Stiglitz argues, would not only worsen the recession in Greece already deeper and more prolonged than the Great Depression in the U.S. it would also wreck the credibility of Europes common currency, the euro, and put the global economy at risk of contagion.
http://time.com/3939621/stiglitz-greece/