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Thomas Piketty: anti-austerity parties may be Europe's best bet


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Thomas Piketty. Image courtesy The Daily Beast

Influential French economist Thomas Piketty has said that the introduction of anti-austerity measures would be a boon to the greater European economy. Podemos and Syriza, two anti-austerity political parties based in Spain and Greece, respectively, have formed in response to the stagnating European economy. Piketty, who wrote the wildly popular tome “Economics in the 21st Century,” has even gone as far as to agree to act as an informal economic policy adviser to Podemos.

Stephen Burgen writes in the Guardian:

The rise of anti-austerity parties in Greece and Spain is “good news for Europe”, the economist Thomas Piketty has said, adding that citizens are paying the price of “incredible” attempts to force southern European countries to pay off their debts too fast.

“The French far right is much more dangerous than Syriza or Podemos, which are pro-European parties that want to build a different Europe,” author of the best-selling Capital in the Twenty-First Century said in a TV interview with Pablo Iglesias, founding leader of Spain’s new party Podemos, to be screened on 18 January.

“You can argue that, in Syriza’s case, their policies are not as clear as they might be, but you have to offer them support because they want to build a democratic Europe, which is what we all need.”

Podemos has shot to political prominence in Spain since it was founded nine months ago, allying itself with the anti-austerity stance of Syriza in Greece.

With Greece’s general election just two weeks away, the incumbent prime minister Antonis Samaras’s New Democracy party continues to trail Syriza in polls by 2-3 percentage points. Samaras sought to counter the leftists’ appeal at the weekend with a personal pledge that Greeks would suffer no more pension or wage cuts.

In the hour-long TV interview, Piketty described austerity policies as “a failure” and supported the Podemos agenda of a basic income for those most affected by the crisis as well as restructuring debt, a policy that has been heavily criticised by Spain’s hitherto dominant parties, the Socialists and the Partido Popular.

He pointed out that at the end of the second world war France and Germany’s debt was 200% of GDP, “when there was no such thing as public debt”. “It’s incredible,” Piketty said. “It’s an act of historical amnesia to tell southern European countries that they have to pay all their debt, down to the last cent, with zero inflation.”

The economist believes that European countries have tried to get rid of their deficits too quickly. The result is that “their citizens have suffered the consequences in the shape of austerity policies. It’s good to reduce deficits, but at a rate that’s commensurate with growth and economic recovery, but here growth has been killed off.”

Last week Piketty poured cold water on the Spanish government’s claims that the crisis was over and insisted the eurozone still faced the risk of stagnation, weak growth and negative inflation.

What are your thoughts on these new anti-austerity parties? Read the full piece on The Guardian here.