They also identified two factors of success

Is Europe going in the decor Full turning of the crisis, its rulers are brutal brake stroke. The next year, all European countries apply restrictive budgets. The new British Prime Minister, David Cameron, takes accents churchilliens to talk about "painful time", the German Chancellor, Angela Merkel, evokes a "single effort", the number two of the Spanish Government explains that "these measures are painful, but necessary" and his Italian counterpart relies on "heavy sacrifices". There is little in France that it denies the subject. The two heads of the Executive are rare discretion on the issue, leaving Patrick Devedjian reject any plan of austerity "because there is a risk of killing growth."

In this European climate of rigour, the Minister of the stimulus is obviously an existential problem. The uncertainty on the future of his Morocco however, is not a sufficient argument to exclude his objection: too great rigor could well kill growth. A man and two examples are often advanced to justify this fear. Man, this is of course in John Maynard Keynes, the elegant English economist who had theorized the intervention of the State to support the demand and therefore growth. The first example is the budgetary rigour of the 1930s, which had further deepened recession. In 1935, the head of the Government, Pierre Laval, had thus balanced the budget by reducing all public spending by 10, including the pay of officials, but the production was at the time declined by 3. The second example is the increase in VAT practiced by the Japan in 1997, making transplants nose consumption and growth, after several years of depression.

The measures announced so far in Europe are less detailed. The quantifications established by different teams of experts, their impact would be less than 1 of the GDP - step what cry wolf. But what happens if these plans were reinforced To determine the actual effect of strict policies, economists are fighting kicked elasticity and multipliers. As always, they are not in agreement and the reality is more complicated than their models. But in recent years, some of them have abandoned these theoretical battles. They had the strange idea for their profession look at what happened in the countries who have applied rigorous plans. They first found that growth is in General stronger after adjustment and shown two evidences. First, it is easier when the rest of the world goes well. If Asia so soon found the path of growth after the 1997-1998 crisis and the rigour imposed by the IMF, it is because America and Europe were then moving at high speed. Then it goes better with a massive devaluation of the order of 20 to 30. Monetary air then compensates the budgetary tightening. By chance, it is a little what might happen to Europe. Emerging countries are currently on trajectories of growth of 6 over the year, said the World Bank in its report published yesterday. And America is distributed to 3 the year (as it is by pulling on the savings, it may not last, but you need to know to enjoy). As the fails the euro has already lost almost 20 in six months.

The OECD and the IMF experts studied dozens of episodes of fiscal consolidation. They found less obvious results, the effects of "non-Keynesian" (1). They have even forged a funny expression: "expansionist budgetary contractions." When the Sweden, the Denmark, the Finland or the Ireland brutally tight budgetary screw, in the 1980-1990s, growth returned! The miracle is explained by the decrease in interest rates (but for countries such as the France or the Germany, the rates are currently already very low) and the returned confidence of consumers and businesses (there, there is much to gain).

They also identified two factors of success. On the one hand, the Government must register in a medium-term horizon, with programs on rules of balance and several years. This is the case in which was announced at this time in Europe. On the other hand, it is more efficient to reduce public expenditure to increase the