All entries for Sunday 10 November 2013

November 10, 2013

The dangers of austerity policies: a lesson from history

A lletter published in the FinancialTimes recently spells out the likely consequences of the EU's austerity policies.

Comparing the present severe deflationary policies forced on the southern European countries with what the Treaty of Versailles did to Germany after the First World War, it quotes the prophetic words of Keynes in "The Economic Consequences of the Peace":

“If we take the view that Germany must be kept impoverished and her children starved and crippled . . . If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp.”

Fourteen years later Hitler and the Nazis came to power in Germany which led to the Second World War.


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