IIF Claims Austerity Worsens Greek Econ. Crisis; Says Effort to Spur Growth Preceded by Austerity

An influential group of international banks and insurers has attacked political leaders in Europe over their handling of the economic crisis in Greece -- arguing that the single-minded pursuit of austerity has made the situation worse -- the Guardian (British) website reports today (October 4, 2012).

The Institute of International Finance (IIF) -- which last year brokered a deal between Greece and international bond investors to halve Greece's private debts -- said politicians were playing a dangerous game by putting their desire for debt reduction ahead of coordinated efforts to spur growth.

Charles Dallara -- the IIF chairman -- said the world's major economies needed to coordinate their efforts or risk persistent instability and low growth.

He added, "If we want to lay the basis for a durable global economic expansion, then we need to see more concerted action by the world's policymakers."