The notion that, without austerity, Europe would be in rude health overlooks the lesson of the financial crisis: debt-fuelled growth is illusory and cannot continue indefinitely. Indeed, spending cuts were only ever one side of the coin. According to the theory, while spending cuts brought down unsustainable debts, a shake-up of labour markets, tax regimes and the like would secure the longer-term recovery. In practice, however, reform is patchy at best.
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