A New Push For Austerity

Tags: Economy
In an op-ed published in The Financial Times on Sept. 5, Wolfgang Schäuble, the German finance minister, urged European governments facing high levels of debt not only to implement austerity measures, but to do so immediately, “however politically painful.” He suggested that in order to foster a true recovery from the continuing economic stagnation across the continent, governments should focus on ensuring long-term growth rather than on emerging quickly from the current global downturn.

Timothy Geithner, the United States Treasury secretary, and Christine Lagarde, the International Monetary Fund’s managing director, called upon European leaders to resolve the debt crisis after officials failed to agree on any concrete resolution during a meeting of the Group of 7 on Sept. 9. President Obama also urged them to come up with a clear solution, telling a group of Spanish-speaking journalists in Washington on Sept. 13 that Europe’s leaders “must meet and take a decision on how to coordinate monetary integration with more effective coordinated fiscal policy.” Earlier this month, Mr. Obama unveiled his $447 billion American Jobs Act — a plan that includes an extension of payroll tax cuts and an increase in infrastructure spending, and which Mr. Geithner and other officials say may insulate the American economy from fallout from Europe’s debt woes. Although Mr. Obama has stressed that every measure in the plan had been supported by both Democrats and Republicans in the past, many analysts have said that the Republicancontrolled House of Representatives is unlikely to pass the proposal in full.

Still, the results of national polls released just before the announcement of Mr. Obama’s plan indicate that a majority of voters support ideas included in the legislation, such as ending certain tax breaks for the wealthy and improving the nation’s infrastructure.

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