Nobel-winning economist, Joseph Stiglitz, says Greece and Spain are in a “depression, not recession,” blaming harsh austerity measures for their economic plunge. (PressTV) “I’m more pessimistic than they are (about growth)…I see significant risk of continuing turmoil,” Stiglitz said during a conference held by the Organization for Economic Cooperation and Development in New Delhi on Wednesday.
The Economist said the International Monetary Fund was “a little too optimistic” in its forecast of the eurozone, with countries trapped in a vicious cycle of spending cuts and stagnant growth.
“That impact was brought about by austerity,” the Nobel winner said, adding that “austerity is bringing Europe down and diminishes chances of making things work.”
Greece has been at the epicenter of the eurozone debt crisis and is experiencing its fifth year of recession, imposing harsh austerity measures which would qualify the country to receive bailout funds worth 31.5 billion euros.
The Spanish government has also been sharply criticized over the austerity measures that are hitting the middle and working classes the hardest.
Spain, Greece, Italy, Cyprus and Portugal are all in recession and all five are receiving financial assistance from European bailout funds.
The long-drawn-out eurozone debt crisis, which began in Greece in late 2009 and reached Italy, Spain, and France in 2011, is viewed as a threat not only to Europe but also to many of the world’s other developed economies.