O artigo analisa em retrospectiva o PIB e a dívida pública a 3 países da Europa entre 2000 e 2012.
Temos dado a maior importância a este tema do Crescimento vs Austeridade aqui e aqui.
O artigo está em inglês. Caso tenham dificuldade em compreendê-lo, façam um comentário e poderemos traduzi-lo. E por ser extenso dividi-mo-lo em 3 posts:
1ª Post incide sobre Portugal; 2º sobre Itália; 3º sobre Espanha.
Give Austerity A Chance: Growth Spending Failed
The markets may decide to play along with the renewed talk of growth and the death of austerity, but it is shocking how quickly writers and the media have latched on to the idea that growth will somehow save us and that the entire problem is the fault of austerity.
Although it seems like it has been around for awhile, austerity is fairly new. I don’t think Greece even got nailed with austerity until May of 2010. In September 2010 when EFSF and ESM were first officially launched, Portugal and Ireland were both contributing members. The first time austerity was mentioned in Spain and Italy had to be the summer of 2011, if not later?
Until that time, I assume growth was part of the policy of most countries? I find it hard to believe any country engaged in an anti-growth policy? Was not every policy in Europe, up until at least 2010 if not beyond, actually a “growth” policy? Why did they fail to create enough growth to stop the debt crisis?
Ah, that is the other problem. It isn’t just growth that is needed, certainly not to comfort the bond market, it is growth that surpasses the amount spent (borrowed) to create it.
So Portugal has been mired in weak economic growth since 2001. It spent most of the decade with growth between 0 and 2% and had two significant downturns. The entire time, debt to GDP was increasing. Was Portugal not “spending” the entire low growth period from 2003 until 2008? It is possible that they kept “spending” to get some “growth” KNOWING that in the future things would be better?
This period is important. There was low growth, yet the debt was increasing at a faster rate. Why? The best guess is that they were spending trying to achieve better growth. It didn’t work. 2008 hit, and growth was a disaster, which led to even more spending, but then growth slowed and took a turn for the worse, even BEFORE austerity hit.
The spending bubble to get through the 2009 period, aided by the global turnaround, failed to create sustainable growth. Portugal was already seeing their economy deteriorate before austerity came into play. Why? Because the debt burden had grown so large that a country with a weak, deficit inflated economy couldn’t afford to maintain.
Has austerity made it worse? Possibly, but the economy did worse in 2009 than it is doing now, so we shouldn’t underestimate Portugal’s ability to outperform to the downside. Peopled seemed comfortable spending for 10 years with minimal results, but a year into austerity (amidst a global slowdown), and suddenly austerity is bad? Portugal took a decade to judge that spending was not achieving growth, and in about a year has decided to go back to that?
And yes, austerity does have a near term negative impact to growth. That was known going into it. In fact it is basic math, so expecting cuts not to result in some economic slowdown is either the result of naivety or being too lazy to do some basic math on GDP calculations. Some austerity measures have a bigger near term impact than others, but to expect no impact, especially in a weak global economy is just wrong. The key is what the situation will be like in a year. Yes, a year is a “long” time, but still, why are we so quick to judge?
On Portugal, it looks like spending to achieve growth failed miserably, and possibly caused the problem, and the rush to the conclusion that somehow austerity is to blame seems premature if not completely incorrect.