EC Austerity Is Backfiring

Euro zone rules are stifling recovery

The euro zone slump is causing tax receipts to plunge and budget deficits to surge. Economists predict that the 12 countries that share the euro will spend $120 billion more than their income next year. That's 2% of gross domestic product -- way beyond the 0.3% shortfall that governments forecast when they set out their medium-term fiscal objectives a year ago.

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