Ways Out of the Crisis
The EU recommends that 24 out of the 27 EU countries should tighten fiscal policy. Some countries have tightened fiscal policies already in 2010 and some have decided on more ambitious consolidation plans than recommended by the Commission. Macroeconomic model calculations show that it will have serious consequences for both GDP growth and employment if all 24 countries tighten fiscal policy at the same time. A second path is to introduce reforms. Model calculations show that a strategy based on investments in green growth, increasing productivity and the education level, fighting social inequality and introducing a Financial Transaction Tax can create almost 6.5 million jobs over the next 20 years.