by Matthew Melchiorre
Competitive Enterprise Institute
June 26, 2013
European governments that have cut both spending and taxes as part of their austerity programs have higher rates of economic growth than their neighbors. Then why do we hear lamentations from the news media and politicians about “savage” budget cuts leading Europe to economic ruin? Because they are looking at the data in the wrong way. This report measures austerity and its effects from the time austerity officially began in each country. The results are quite different from those that have been cited widely in the media. Proclamations of austerity notwithstanding, most European countries have cut neither spending nor taxes. Yet, the ones that have are now growing the fastest.