Europe's austerity drive is suicidal: Stiglitz

VIENNA (Reuters) - Europe's attempt to save its way back to health is tantamount to economic suicide that could wreck the euro currency block, Nobel Prize-winning U.S. economist Joseph Stiglitz said, calling for the continent to focus instead on fostering growth.

"I think Europe is headed to a suicide...There has never been any successful austerity program in any large country," the former World Bank economist told a panel discussion in Vienna late on Thursday.

Austrian radio on Friday broadcast some of his comments, which chime with a growing backlash in Europe against the German-led push for more fiscal discipline as the way to end the debt crisis.

"Decreasing growth is causing the deficit, not the other way around. I think that austerity approach is going to lead to high levels of unemployment that will be politically unacceptable and make deficits get worse," Stiglitz said.

He urged rich European countries like Germany to invest more in infrastructure, education and technology, arguing that "the returns on those investments are an order of magnitude greater than the cost of capital".

Insisting on cutting debt and deficits as the way to shore up confidence in euro zone countries - as agreed by the currency bloc's leaders late last year - could end up having the opposite impact, Stiglitz said.

"What they have agreed to do last December is a recipe to make sure that (the euro zone) dies as we know it," he said, although he imagined a "core euro" shared among a handful of countries with the strongest economies could survive.

"I hope...the debate will be what are the things we can do to promote growth rather than how do we strangle each other together."

(Reporting by Michael Shields; editing by Patrick Graham)

  • Peeling out at Octane Academy, the free driving school for Ford ST owners 27 minutes ago
    Peeling out at Octane Academy, the free driving school for Ford ST owners

    Buyers of Ferraris or Jaguars are used to perks from manufacturers – including racetrack lessons to help master their exotic machines. But for enthusiasts on a tighter budget, the Ford ST Octane Academy might be the sweetest deal in motoring: Buy a Ford Fiesta ST or Focus ST hatchback, and the reward is a free day of training at one of America’s longest, most-lavish road courses.

  • Why you can't buy America's greenest car 3 hours ago
    Why you can't buy America's greenest car

    Ask me or any auto expert what's the fastest car you can buy for any given amount, and we could easily cough up several options. Same for most luxurious, or off-roadable, or any other measurement. Yet there's one type of question that's far harder to answer: What's the greenest, most environmentally friendly car you can buy today?

  • Audi TT Offroad concept debuts as a 124-mpg hybrid with wireless charging 4 hours ago
    Audi TT Offroad concept debuts as a 124-mpg hybrid with wireless charging

    The TT. Audi's diminutive sports car. Since production began in 1998, the two-door coupe has aged with the pugnacity of a grizzled New Yorker, but not in size. And why would it, as the arrival of the TT RS proved, adding some grit makes for a rather captivating dish. And so you'll excuse us for being puzzled by the Audi TT Offroad concept.

  • Pirates kidnap three on Singapore tanker off Malaysia
    Pirates kidnap three on Singapore tanker off Malaysia

    Armed pirates boarded a Singapore-managed oil tanker in the Strait of Malacca, kidnapping three Indonesian crew and stealing some of the vessel's shipment of diesel fuel, the International Maritime Bureau said Wednesday. The attack occurred early Tuesday off Malaysia's west coast, said Noel Choong, head of IMB's Kuala Lumpur-based piracy reporting centre. The diesel oil tanker was believed to be en route to Myanmar. "IMB is aware of the attack on the Singapore-managed ship in the Malacca Straits.

  • McDonald's Hello Kitty sale site temporarily suspended due to fresh wave of Kitty mania
    McDonald's Hello Kitty sale site temporarily suspended due to fresh wave of Kitty mania

    It may not be safe to enter a McDonald’s restaurant in Singapore on Mondays starting 28 April. To celebrate the iconic Japanese character Hello Kitty’s 40th anniversary, the fast food chain announced last Friday that it would be releasing a new collection of Hello Kitty toys in McDonald’s restaurants island wide next Monday.

  • First sign of S.Korea ferry disaster was call from a frightened boy
    First sign of S.Korea ferry disaster was call from a frightened boy

    He called the emergency 119 number which put him through to the fire service, which in turn forwarded him to the coastguard two minutes later. That was followed by about 20 other calls from children on board the ship to the emergency number, a fire service officer told Reuters.