Europe's fiscal strategy is self-defeating

There are three ways to read the Eurozone's focus on austerity ...

The first is that its leaders genuinely think that the current crisis is rooted in non-observance of the stability pactThe second is that treaty-based discipline is the precondition for a fiscal union and the issuance of Eurobonds. .The third is that consolidation in southern Europe is the cornerstone of a broader strategy of economic reforms, which in turn will contribute to competitiveness.

Seen in this light, austerity is not (or not only) an end in itself but also the driver of a broader transformation. The question is, can it deliver? ... READ MORE

Released by the Financial Times 5 February 2012