http://www.bbc.co.uk/news/business-17890575
The UN is back-stabbing itself.
The International Labor Organization blames the government spending cut in Europe as the cause for high unemployment. They encouraged these countries to follow expansionary fiscal policy and increase governmetn spending in order to revive the economy.
However, the International Monetary Fund, another UN agency, is notorious for bailing out troubled economies on the condition of financial austerity. In other words, the IMF have always required weakened economy, such as Spain and Greece, to cut the spending and balance the book. This is, ironically, contradicting the recommendation of the ILO.
The UN is back-stabbing itself.
The International Labor Organization blames the government spending cut in Europe as the cause for high unemployment. They encouraged these countries to follow expansionary fiscal policy and increase governmetn spending in order to revive the economy.
However, the International Monetary Fund, another UN agency, is notorious for bailing out troubled economies on the condition of financial austerity. In other words, the IMF have always required weakened economy, such as Spain and Greece, to cut the spending and balance the book. This is, ironically, contradicting the recommendation of the ILO.
2 comments:
This approach by the IMF is quite similar to what it used for the East Asian economies for their crisis during the 90's. Even at that time, their policy recommendations failed to improve the economic situation of those countries causing high unemployment. I think some extra spending in the short-term to create more jobs can be beneficial in the long run to balance the budget when more income earning people pay taxes.
I think the recommendation of the ILO is quite irresponsible. The European economies are already in a huge deficit and balancing their budget should be a priority. Increasing government spending is not the only way that can help the employment condition. Giving corporations some tax breaks can give them incentives to create more jobs and thus will create more taxpayers, which will also increase the tax revenue of the government.
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