FT: Romania provides cautionary tale on austerity’s charms

The Financial Times has recently published an article quoting economist Cornel Ban from the Watson Institute saying Latvia and Romania have emerged as controlled experiments on bold austerity policies. “Thus, both Latvia and Romania emerge as controlled experiments for the hypothesis that the benefits of bold austerity policies will – always and everywhere – outweigh the negative impact of the decline in tax receipts the cuts contributed to in the first place,” writes Ban in a comment for the Financial Times. “Indeed, Latvia and Romania are the only EU member states that simultaneously cut public sector wages by about 30 per cent, increased the value added tax for all sales and shrunk the public sector workforce by almost 20 per cent,” the article goes on. Read the entire article here. editor@romania-insider.com