Why Europe’s austerity experiment is doomed to fail

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I’ve spent the past two weeks in Europe, with speak­ing engage­ments in Italy, Greece and Aus­tria. This was my first vis­it to Greece, and my first chance to get an admit­ted­ly super­fi­cial tourist’s view of what a coun­try with Great Depres­sion lev­els of unem­ploy­ment looks like.

It didn’t look like any­thing in par­tic­u­lar until the dri­ve from Athens, Greece’s cap­i­tal and largest city, to Thes­sa­loni­ki, its sec­ond largest. Then it struck me: the roads were near emp­ty — as the toll booth shown in Fig­ure 1 illus­trates. My host Nikos reck­ons he has done a mil­lion kilo­me­ters over the years on this 500km dri­ve, and he con­firmed that roads which were now vir­tu­al­ly emp­ty were once full of cars, and espe­cial­ly trucks — that mobile sign of a thriv­ing econ­o­my.

Fig­ure 1: A toll booth on Greece’s main high­way at about 5pm: no vehi­cles in either direc­tion
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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.