“Does Europe need some ‘austerity austerity?’” observes J.P. Morgan Funds’ Market Strategist Andrew Goldberg. Goldberg’s question is economic but also political. The EU often seems focused on added austerity as the best route out of its continuing sovereign debt crisis, but this itself is a policy decision, and one increasingly contested in struggling peripheral countries.

How Europe can—and should—respond to its ongoing sovereign debt crisis, and whether further austerity helps or hurts remains an open question. The answer to this question and hence ultimate outcome of the crisis will affect the future of the euro, and even the EU itself. Planners closely tracking the European austerity debate have to pay attention to both ever-changing European treaties (and how they are actually implemented) as well as government balance sheets.

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