In the last three years the IMF has revised upwards the size of fiscal multipliers. This has devastating implications: if the fiscal multiplier is greater than the inverse of the Public Debt/GDP ratio, fiscal consolidation necessarily raises instead of lowering the Public Debt/GDP ratio with respect to what it would have been without consolidation. This appears to be the case for all or nearly all of advanced countries.
The Euroarea has suffered greatly from two major design failures - a premature birth and a diminished European Central Bank - which are the original sins of the Common Currency.
A zona euro tem sofrido imenso de dois grandes fracassos da sua arquitetura de raiz, que são os pecados clássicos de uma moeda comum, e igualmente de um aumento da divergência dos Estados-membro a partir de características económicas comuns, em vez de um processo de convergência.
According to Joschka Fischer, the former German foreign minister, it would be a tragedy if Germany, which twice destroyed Europe in the 20th century, now were to do the same again through punitive solutions rather than resolve the Eurozone crisis by solidarity.
