U-turn needed ‘to avert disaster’

The current policies of austerity and structural reforms are a disaster for the eurozone and unless there is a U-turn in policy soon that includes a growth stimulus and some form of eurobond, then there can be no comprehensive solution to the crisis, said Peter Bofinger, who is a member of the influential German Council of Economic Experts.

In a wide-ranging speech to the Institute of International and European Affairs (IIEA) in Dublin, Mr Bofinger argued that the impact of structural reforms on economic growth is overestimated. “Does the opening up of certain professions to competition really lead to growth?”

His position is completely at odds with the German government, which insists that fiscal consolidation and boosting an economy’s competitiveness are the only viable pathway out of this crisis.