Tags: Austerity | Europe | euro

Experts: Austerity May Go Overboard in Europe

Wednesday, 04 Jan 2012 07:57 AM

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
Austerity measures such as tax hikes and public-sector layoffs imposed in debt-ridden southern European countries may be going overboard, experts say, pointing out such steps will cut into growth.

Countries such as Greece have agreed to undertake tough austerity measures in exchange for aid or investor turnout at bond auctions, although layoffs and tax hikes designed to streamline the public sector and ease debt burdens mean less tax revenues down the road.

Less people working means less money coming back in. Plus, a small government means less economic output as well.
_________________________________________________________

Unthinkable ‘Death Cross’ Signal Haunts Investors

MarketWatch reports that “all three major U.S. indexes now are in Death Cross mode,” signaling a possible crash. Watch the Aftershock Video, Be prepared!

_________________________________________________________

"Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes," says Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva, The New York Times reports.

"We’re going straight into a wall with this kind of policy. It’s sheer madness."

eurogetty200v3.jpg
(Getty Images photo)
Europe is already on the road to recession, many say.

"Europe is likely to have a meaningful recession in 2012," says Tobias Levkovich, Citigroup’s chief equity strategist, The New York Times adds.

While U.S. businesses may not be directly exposed to problems in Europe, protests stemming from austerity measures could spark worries in U.S. capital markets.

"Powerful street protests could bring it back to the front pages," Levkovich says.

"We've seen episodic crises in Europe over the past two years. It's a recurring event."

Greek Prime Minister Lucas Papademos told the country in a New Year's Eve address that Greece must prepare for another tough year that includes sticking with austerity measures.

"A very difficult year is ahead of us. We must continue our efforts with decisiveness, to stay in the euro, to make sure we do not waste the sacrifices and do not turn the crisis into an uncontrolled and disastrous bankruptcy," Papademos said, Reuters reports.

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Sony Hackers Taunt FBI, 'Congratulate' Its Success

Saturday, 20 Dec 2014 20:06 PM

A new message claiming to be from the group responsible for the Sony Pictures hack appears to mock the FBI, which named  . . .

US Turns to China to Help Stop NKorean Hackers

Saturday, 20 Dec 2014 19:42 PM

The Obama administration is seeking China's help in stopping North Korea from launching future cyber-attacks, the New Yo . . .

RNC to Theaters: 'We Cannot Be Bullied,' Show 'Interview'

Saturday, 20 Dec 2014 19:20 PM

The Republican National Committee is urging theater owners to play the The Interview following Sony's decision to pull . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved