France has been intimidated by Germany into pursuing an economic policy that is not working, Nobel prize-winner Joseph Stiglitz said on Monday, reports Business Day Live.
"There is a kind of intimidation," Mr Stiglitz, an outspoken opponent of austerity policy, said of the influence of Germany over the policies pursued by President François Hollande.
Mr Stiglitz said he agreed with former Greek finance minister Yanis Varoufakis that Germany’s intransigence against Athens was aimed at striking fear in Paris and convincing the French government to continue austerity policies.
"The centre-left government in France has not been able to stand up against Germany" on its budget policy and eurozone policy, or on the response to the Greek crisis, said the former World Bank chief economist and adviser to former US president Bill Clinton.
He criticised the European Union for focusing on nominal deficits of members rather than those adjusted for the economic cycle, and the policy response.
"Cutting taxes and expenditures contracts the economy, the opposite to what you need," said Mr Stiglitz. "I do not understand why Europe is trying that after all the evidence, all the theory says it does not work."
Read more of this AFP report published by Business Day Live.