“The single-minded concentration on austerity policy (in the 1930s) led to mass unemployment, a breakdown of democratic systems and, at the end, to the catastrophe of Nazism,” said Ewald Nowotny [Austria’s central bank governor and member of ECB governing council] at a financial conference in Vienna. He added that central bankers during the start of the financial crisis had been very keen to avoid the mistakes of the 1930s.
Mr. Nowotny also cautioned against trying to impose a “moralistic” solution to the euro zone’s current debt problems. “It is not about punishing children who have behaved badly,” he said, adding that it was important not to let the concept of moral hazard turn into an excuse for not taking “practical initiatives.”
via ECB’s Nowotny Cautions Against ‘Single-Minded’ Austerity – Real Time Economics – WSJ.