Press

New York Times

German Calls for Austerity Have Europe Grumbling

PARIS - Across Europe, from profligate Greece to newly strait-laced Ireland, countries are promising deep, painful cuts in public spending even as they face the likelihood of a new recession.

To protect the value of the euro, satisfy investors and appease Europe's economic taskmaster, Germany, the region's most heavily indebted nations consider that they have no choice but to slim down. Reviving economic growth and reducing unemployment must wait until countries put their fiscal houses in better order, the thinking goes.

But some argue that Berlin is pressing too hard, and that the region's new fixation on debt has created a "cult of austerity" that could make it harder to recover from the slump. Drastic budget cuts, if carried out as promised, could set off deflation, send already high unemployment rates surging, bring governments down and even create popular opposition to the euro, critics say. Click here for more.