欧洲财政作为一个整体并没有到惨不忍睹的地步，他们的债务占GDP比率比美国要低得多。如果美国的每个州为自己的预算负全部责任，包括支付失业补助，那么美国同样也会遭遇债务危机。结论很明显：整体要比各个部分的总和多得多。如果欧洲，尤其是欧洲央行去借钱，然后将收益自行进行转贷，那么应对欧洲债务危机的成本就会降低，剩下来的钱就可以用于刺激经济发展或者提高就业。
在欧洲内部已经有这样的机构可以这样做，比如欧洲投资银行，它可以为那些急需现金的国家提供资金。欧洲投资银行应该扩大放贷数量。因为需要有大量的资金来支持中小企业的发展。中小企业也是任何经济体中创造就业岗位的主要对象，考虑到银行紧缩信用给这些中小企业造成的打击，这些资金对他们更为重要。
欧洲单一执行财政紧缩政策是对欧洲问题误诊导致的结果。希腊确实出现多读花费的问题的，但是在危机爆发前，爱尔兰和西班牙的财政还有盈余，而且债务占GDP比率也很低。一直强调财政紧缩的说辞恰好是偏离了主题。如果拿此番说辞当真，甚至是真的减少预算，那么只会适得其反。不管欧洲的问题是暂时的也好还是根深蒂固也好，欧元区都不是一个最佳的货币区域，在一个自由贸易以及自由移民的区域里税收竞争只会不断侵蚀区域经济，而财政紧缩会让事情变得更糟。
欧洲如果实行财政紧缩政策其结果可能会更糟，影响也更久远。如果欧元度过此劫，那么其代价则是高失业率以及无数的困难尤其是那些受影响的国家。然而危机很可能会自己蔓延。如果一直这样火上浇油，那么防火墙并不会发挥多大的作用。欧洲现在所做的就是这样：像欧元国这样的大经济体依靠财政紧缩恢复过来，历史上还没有过前例，欧洲是目前世界上最大的。
因此，社会上最为宝贵的资产也就是人力资本将会被浪费甚至是被毁灭。年轻人长时间没有一份体面的工作，在某些国家，年轻人失业率将近50%，这是从2008年以来的最高纪录。当他们再次找工作时，其工资水平也不会很高。一般说来，青年时期正是增加工作经验的最好时机，但是如今却是他们的萎靡时期。
许多经济体在自然灾害面前都是很脆弱的比如地震，洪水，台风，飓风，海啸，如果再加上人为灾祸，简直是雪上加霜。但是这就是欧洲现在正在做的事情。事实上，欧洲的领导人任性的不顾过去的经验教训的行为是有罪的。
欧洲正在遭受的痛苦，尤其是老少人群，其实是完全可以避免的。幸运的是 欧洲还有其他选项可供选择。但是拖延机遇会让成本变得越来越高，而欧洲正在磨时间。
Europe as a whole is not in bad fiscal shape; its debt-to-GDP ratio compares favorably with that of the United States. If each US state were totally responsible for its own budget, including paying all unemployment benefits, America, too, would be in fiscal crisis. The lesson is obvious: the whole is more than the sum of its parts. If Europe – particularly the European Central Bank – were to borrow, and re-lend the proceeds, the costs of servicing Europe’s debt would fall, creating room for the kinds of expenditure that would promote growth and employment.
There are already institutions within Europe, such as the European Investment Bank, that could help finance needed investments in the cash-starved economies. The EIB should expand its lending. There need to be increased funds available to support small and medium-size enterprises – the main source of job creation in all economies – which is especially important, given that credit contraction by banks hits these enterprises especially hard.
Europe’s single-minded focus on austerity is a result of a misdiagnosis of its problems. Greece overspent, but Spain and Ireland had fiscal surpluses and low debt-to-GDP ratios before the crisis. Giving lectures about fiscal prudence is beside the point. Taking the lectures seriously – even adopting tight budget frameworks – can be counterproductive. Regardless of whether Europe’s problems are temporary or fundamental – the eurozone, for example, is far from an “optimal” currency area, and tax competition in a free-trade and free-migration area can erode a viable state – austerity will make matters worse.
The consequences of Europe’s rush to austerity will be long-lasting and possibly severe. If the euro survives, it will come at the price of high unemployment and enormous suffering, especially in the crisis countries. And the crisis itself almost surely will spread. Firewalls won’t work, if kerosene is simultaneously thrown on the fire, as Europe seems committed to doing: there is no example of a large economy – and Europe is the world’s largest – recovering as a result of austerity.
As a result, society’s most valuable asset, its human capital, is being wasted and even destroyed. Young people who are long deprived of a decent job – and youth unemployment in some countries is approaching or exceeding 50%, and has been unacceptably high since 2008 – become alienated. When they eventually find work, it will be at a much lower wage. Normally, youth is a time when skills get built up; now, it is a time when they atrophy.
So many economies are vulnerable to natural disasters – earthquakes, floods, typhoons, hurricanes, tsunamis – that adding a man-made disaster is all the more tragic. But that is what Europe is doing. Indeed, its leaders’ willful ignorance of the lessons of the past is criminal.
The pain that Europe, especially its poor and young, is suffering is unnecessary. Fortunately, there is an alternative. But delay in grasping it will be very costly, and Europe is running out of time.
