€urosclerosis: Guess what? Austerity works!

It has been a while since we have addressed the crisis in Greece, the last article, , coming last August, and now we see this from The Wall Street Journal:

Greek Budget Surplus Beats Target
Prime Minister Antonis Samaras Says 2013 Surplus Will Be Nearly Double Its Target
By Stelios Bouras | Feb. 16, 2014 8:02 a.m. ET

ATHENS—Greece’s primary budget surplus for 2013 will be nearly double its target, the country’s prime minister said Sunday.

Antonis Samaras said the primary budget surplus, which doesn’t take into account interest payments, will exceed €1.5 billion ($2.05 billion), compared with an upwardly revised target of €812 million.

The apparent improvement comes a year ahead of schedule and after years of tax rises and spending cuts demanded by international creditors in exchange for two bailouts worth a combined €240 billion. Athens wasn’t expected to achieve a primary surplus until the end of 2014, according to goals set by the European Union and the International Monetary Fund.

“I tell you now that it exceeds €1.5 billion,” Mr. Samaras is quoted as saying by weekly newspaper To Vima in comments confirmed by his office. “This means that a very large part of it will be returned this year to the community.”

More at the link. Equally interesting are the articles listed in the Journal’s Euro Debt Crisis Stream:1

  • Euro-Zone Recovery Picks Up Slightly
  • Italian Economy Emerges from Slump
  • Europe’s Recovery Gains Momentum
  • Greek Economy Contracts Less Than Expected

The economic picture in Europe is far from rosy, and the eurozone recovery is still below that required to make a significant reduction in unemployment, but the austerity programs put in place have been followed by an economic situation that is growing, slightly, and at least not getting any worse, while the naysayers — including the esteemed Paul Krugman had predicted that austerity programs would lead to a depression.

Let me put it very bluntly: they were wrong! The people who spent much newsprint, broadcast time and internet bandwidth telling us that we must spend, spend, spend to push a recovery, and that the austerity programs would make things worse, much worse, were wrong! Meanwhile, those of us who said that austerity might be unpleasant but it was the only path for responsible government leaders, were right.

Of course, it’s easy for Dr Krugman and his like-thinkers to tell us that we must borrow and spend ever more money, to get the nation and Europe out of recession, because they are actually responsible for nothing. If Dr Krugman’s predictions wind up wrong, as they have, there’s no harm done at all, at least not if his policy prescriptions were not employed by governments who believed him.   The men and women who actually are responsible for their country’s well-being have to be right, and the evidence is that the ones who chose austerity, the ones who (finally) opted for a conservative economic policy were right.

  1. All articles have the same hyperlink in the stream

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