Abstract
This paper is in two sections. The first briefly outlines some relevant lessons from the Latin American debt crises for the current European financial crisis. The second part deals with the European crisis, discussing pan-European measures to promote growth as well as exploring options for reducing and/or postponing debt servicing in European countries with difficulties for market access, with a view to opening greater space for national growth-oriented strategies within them. It then examines the possibility of less fiscal consolidation in European countries with market access, and shows in some detail, using the example of the UK, how such a policy would lead to far higher output and employment.
I would like to thank Marcus Miller, Peter Holmes and Jim Rollo for insightful discussions while drafting the paper as well as Edward Griffith-Jones for excellent research assistance. I am very grateful to participants in the IEA conference in Buenos Aires for insightful suggestions, especially Joe Stiglitz, Hernan Seoane, Jose Antonio Ocampo, Roberto Frenkel and Daniel Heymann for valuable comments. Any mistakes are my own responsibility.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Bagaria, N., Holland, D., and Van Reenen, J. (2012) “Fiscal Consolidation During a Depression,” Centre for Economic Performance Special Paper, no. 27, August. Available online at http://cep.lse.ac.uk/pubs/download/special/cepsp27.pdf.
Bertola, L. and Ocampo, J.A. (2012) “Learning from Latin America: Debt Crises, Debt Rescues and When and Why They Work,” Institute for the Study of the Americas. Available online at http://americas.sas.ac.uk/fileadmin/ISA/documents/events/Papers/Bertola_and_Ocampo_paper.pdf.
De Grauwe, P. (2012) “The ECB Can Save the Euro — But It Has To Change Its Business Model,” July 30, Institute for New Economic Thinking Blog. Available online at http://ineteconomics.org/blog/inet/paul-de-grauwe-ecb-can-save-euro-it-has-change-its-business-model.
Draghi, M. (2012) “Introductory Statement to the Press Conference (with Q&A),” European Central Bank Press Conference. Available online at http://www.ecb.int/press/pressconf/2012/html/is120906.en.html.
Ffrench-Davis, R. and Griffith Jones, S. (2005) Coping with Capital Surges: The Return of Finance to Latin America (London: Lynne Rienner Publishers).
Griffith-Jones, S. (1988) Managing World Debt (Hertfordshire: Harvester Wheatsheaf).
Griffith-Jones, S. and Shiller, R. (2006) “A Bond That Insures Against Instability,” The FT, July 10. Available online at http://www.ft.com/cms/s/2/b7155454–1039–11db-8f6f-0000779e2340.html.
Griffith-Jones, S., Kollatz-Ahnen, M., Andersen, L. and Hansen, S. (2012) “Shifting Europe from Austerity to Growth: a Proposed Investment Programme for 2012–2015,” FEPS-IPD-ECLM Policy Brief. Available online at http://stephanygj.net/papers/auster-ity-to-growth.pdf.
Griffith Jones, S. and Hertova, D. (2012) “Growth-Linked Securities,” Global Economics in C.F. Bergsten and C.R. Henning (eds), Extraordinary Times: Essays in Honor of John Williamson (Washington, DC: Peterson Institute for International Economics).
Holland, D. and Portes, J. (2012) “Self-defeating Austerity?,” VoxEU. Accessed online at http://www.voxeu.org/article/self-defeating-austerity. Longer version: Holland, D. and Portes, J. (2012) “Self-defeating Austerity?,” National Institute Economic Review, 222.
Holmes, P., Gonzalez, J.L., and Gasiorek, M. (2012) “Greek Trade Balance Improves but Overwhelmingly Due to the Recession,” Trade Sift Note, University of Sussex. Available online at http://www.sussex.ac.uk/caris/documents/tradesift-sample-report-greek-trade-balance-improves-but-overwhelmingly-due-to-the-recession-june2012.pdf.
IMF (2012) World Economic Outlook. October.
Pisani-Ferry, J. and Merler, S. (2012) “Sudden Stops in the Eurozone,” Vox EU, April 2. Available online at http://www.voxeu.org/article/public-capital-flows-replacing-private-flows-eurozone-what-it-means-policy.
Rehn, O. (2012) “Restoring Growth in Europe: Confidence, Reforms and Investment,” Speech given at Institute of European Studies, Vrije Universiteit Brussel, 5 May. http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/12/330&format=HTML& aged=0&language=EN&guiLanguage=en.
Ritschl, A. (2012) “Germany, Greece and the Marshall Plan,” The Economist, June 15. Available online at http://www.economist.com/blogs/freeexchange/2012/06/economic-history.
Stiglitz, J. et al. (2009) “Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System,” United Nations. Available online at http://www.un.org/ga/president/63/PDFs/reportofexpters.pdf.
Stiglitz, J. (2011) “Eurozone’s Problems are Political, Not Economic,” The FT, July 20. http://blogs.ft.com/the-a-list/2011/07/20/eurozones-problems-are-political-not-economic/?#axzz22xVOk8ij.
World Bank (1999) Global Development Finance. Analysis and Summary Tables (BofA Merrill Lynch Global Research).
Wyplosz, C. (2012) “End of Game? Don’t bet on it,” Vox EU, July 25. Available online at http://www.voxeu.org/article/end-game-don-t-bet-it.
Editor information
Editors and Affiliations
Copyright information
© 2014 International Economic Association
About this chapter
Cite this chapter
Griffith-Jones, S. (2014). From Austerity to Growth in Europe: Some Lessons from Latin America. In: Stiglitz, J.E., Heymann, D. (eds) Life After Debt. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137411488_8
Download citation
DOI: https://doi.org/10.1057/9781137411488_8
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-41147-1
Online ISBN: 978-1-137-41148-8
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)