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In light of a new report from the Independent Evaluation Office of the International Monetary Fund (IMF) which outlines how the IMF ignored its own research in its drive to push for cuts to governments' expenditure, GUE/NGL MEP Fabio De Masi has described the publication of the report as a “slap in the face for Juncker and Merkel's austerity policy”.
“It's not rocket science. Austerity measures implemented in the Eurozone have resulted in seven years of depression,” he said. “This was the wrong policy for both major economies with fiscal space, as well as for Eurozone countries under Troika supervision. As a result we have mass youth unemployment and increasing public debt ratios.”
The German MEP added: “This nonsensical austerity policy has even constricted monetary policy as companies do not invest in such a depressed economy, even at low interest rates. The IMF's own research showed that exclusive reliance on monetary policy is harmful to the global economy as a race-to-the-bottom in interest rates sparks currency wars and speculative capital flows to emerging markets.
“We distrust Jean-Claude Juncker's investment package because it smells of creative accounting and a continuation of structural reforms at the expense of the majority, further dragging down consumer spending. If Juncker's PR offensive about abolition of the Troika only means substituting the IMF's balanced voice with pure orthodoxy from Brussels, then we can only fear the worst.”
“We need an end to austerity measures, the re-financing of public investment by the European Central Bank (ECB) and the European Investment Bank, instead of the financing of financial bubbles, as well as an EU-wide coordinated wealth tax for millionaires, as was also discussed by the IMF.”