Former President Bill Clinton said European leaders need to focus on multiyear plans for economic stimulus to spur growth instead of relying on austerity measures.
“What our friends in Europe have to work out and what we should be encouraging is a strategy that should work over a 5- year period and then over a 10-year period,” Clinton said today in a speech at the Milken Institute Global Conference in Beverly Hills, California. “There simply is not enough growth.”
Clinton criticized high levels of borrowing and a lack of focus on employment initiatives, as reports showed euro-region unemployment rose to the highest in almost 15 years and manufacturing contracted for a ninth month. European Central Bank President Mario Draghi said last month European leaders need to create a “growth compact” as spending cuts across the region damp activity and prompt a backlash among citizens.
Europe doesn’t have a mechanism for struggling countries to leave the euro region, Clinton said. He drew a comparison to Argentina and Ecuador choosing to link to the U.S. dollar and adopt the currency, respectively, in the 1990s and 2000s, which he called a sound strategy “as long as we were on the up escalator.”
“The difference between them and Greece was they could unhook and devalue,” Clinton said. “A lot of people didn’t like it, but it wasn’t calamitous. There was an exit strategy.”
Clinton said the U.S. presidential election will be long on promises the candidates can’t keep. The most important question policy makers can ask today is “How?” rather than “What?” or “How much?,” he said.
“Seventy percent of what we hear won’t make a lick of sense,” Clinton said.
The biggest political divide in the U.S. isn’t between liberals and conservatives, he said. It’s between “communitarians” like himself and “separatists” who are suspicious that government is engaged in a “secret drive to take more away from us,” he said.
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