Greece’s deputy finance minister on Monday said that international creditors had underestimated the impact of three years of austerity on the country’s deep recession by using a faulty calculation.
Christos Staikouras said the actual fiscal multiplier, or negative effect, of austerity on growth is “around 1.0, not 0.5,” the number used by inspectors from the European Union, International Monetary Fund and the European Central Bank to draft their fiscal policy recommendations.
As a result, the 49 billion euros ($64 billion) in cuts imposed by successive Greek governments since 2010 have failed to provide their forecast fiscal results, Staikouras told a conference organised by the International Herald Tribune.
(source: eubusiness)
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