WORLD


EU Voters Nix Austerity, Though It`s Not Been Tried

Baku, May 8 (AzerTAc). The stunning outcomes of elections in France, Greece and Italy were called "a sweeping repudiation" of austerity by more than one media outlet. But how can you repudiate something that`s never been tried?
The EU tried austerity, but it didn`t work. The media and Europe`s beleaguered leftist politicians have made that their refrain, and apparently a lot of European voters now agree.
Now, the left`s argument goes, a new "growth strategy" premised on more government spending, not less, is needed — just like in Spain, Greece and Italy.
Sadly, stimulus in Europe, as in the U.S., didn`t work. As proof, the EU has now entered into its second recession in four years, with soaring debt, rising unemployment and few prospects for future growth.
So the idea that Europeans are "tired" of austerity is false. You can`t be tired of something you haven`t tried. This is why an exasperated German Chancellor Angela Merkel said Monday she`ll continue to demand that other countries make real cuts in spending.
She may be swimming against the tide. Hollande has a 60-point agenda that includes raising taxes on the rich to 75% from 41%, hiking corporate tax rates, boosting government spending and hiring more government workers in a bid to "restore growth."
Meanwhile, in Greece, the winners in Sunday`s parliamentary elections likewise seek an end to austerity — and a return to Greece`s generous welfare state.
It`s a big mistake. Spending cuts, not increases, are the best way to cut deficits and restore growth. And that`s not just our opinion. In their 2009 study of fiscal crises in 27 countries over 37 years, the largest study of its kind, economists Alessandro Alesina and Silvia Ardag-na found "tax cuts are more likely to increase growth than those based upon spending increases."

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