Economist: Austerity not the solution to recession

A leading economist has said austerity has "almost never worked" as a solution to recession.

Professor Joseph Stiglitz told the opening of the International Bar Association Conference in Dublin last night that governments have misdiagnosed what went wrong in the Eurozone and they are advocating the wrong solution.

He said the IMF tried austerity in Asia and Latin America and it was tried in the US in 1929 and each time it succeeded in turning downturns into recessions and recessions into depressions.

He recommends a structural change of the euro arrangement along with reform of the banking system.

He has also suggested Europe is likely to face turmoil for some time to come.