Clinton jabs 'jerry-rigged' EU rescue, urges growth
(BEVERLY HILLS) - Europe cannot end its budget crisis by belt-tightening alone and must promote growth, US ex-president Bill Clinton said Wednesday, lamenting its "jerry-rigged" rescue efforts so far.
He said the countries sharing Europe's single currency should have designed an exit strategy in advance for weaker countries like Greece admitted to the eurozone in good times, but threatened with expulsion in bad.
Clinton, who oversaw sustained economic growth during his two terms in the White House, likened Europe's current crisis to Japan's economic crisis of a decade or more ago, saying long-term solutions are needed, not quick fixes.
"This European crisis has laid bare two problems: one (an) organizational problem of letting in the more vulnerable countries with no exit strategy," he told a business and economic conference in Beverly Hills.
"There was no advance provision for some set of transfer of funds so that its had to be jerry-rigged as we go along," he added, in a session on the European crisis on the final day of the four-day Milken Global Conference.
"The other problem is .. the prescription of austerity has continued to be pushed in the face of all the evidence that it (won't) work," he said.
He added: "Theres no evidence that in a country where there is no private demand, where interest rates are already functionally zero, that an austerity will work.
"In the short run it may suit the credit markets until the day after tomorrow," he said.
But referring to dealing with the huge out-of-control deficits, he said: "You can only do it with growth. You cannot reduce the public debt without proper budget restraints .. and adequate growth.
"If you pretend that there is a realistic solution to this just with budget cuts or tax increases ... it will never work.
His comments came as new figures Wednesday showed eurozone unemployment spiked to a record 10.9 percent in March, piling pressure on governments to shift from austerity-first to growth policies.
May Day protests across Europe this week underlined the theme, with calls for the focus to be put on jobs as the best way forward while too much austerity only makes the problems worse.
"What our friends in Europe have to work out, what those of us in America should be encouraging ... is a strategy that will work over a five-year period, and then will work over a 10-year period," said Clinton.
"Not one that will make everybody happy in three months and six months because there is simply not enough growth."
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