Study: Global austerity costs 2.3 trillion U.S. dollars annually

Hamburg, 14.01.2014 – As a consequence of austerity policies in many countries, millions are deprived of work and vast production opportunities remain unused. A studyby the German-based World Future Council (WFC) states the value of lost production at 2.3 trillion U.S. dollars annually. This corresponds to the gross domestic product of the United Kingdom. The Eurozone alone loses at least 580 billion Euros annually as a result of public austerity.

Jakob von Uexkull, founder of the World Future Council and the Right Livelihood Award, comments: “Given the huge challenges we face including stopping climate change and overcoming poverty, it is shocking that such a large economic potential remains untapped because of misguided policies.”

To address the situation of the global economy realistically, the study uses an evaluation approach that relates unemployed labour to underused productive capital.

Dr. Matthias Kroll, economist at the World Future Council and author of the study, notes: “Austerity may make sense if all economic resources such as labour and physical capital are used to capacity. However, such a situation is rare. Due to the current under-utilisation of production capacity, we are wasting the potential to invest in protecting the planet from climate change and environmental collapse as well as improving education and medical care.”

Jakob von Uexkull: “According to the International Labor Organisation (ILO)
200 million people are unemployed. If public austerity was ended, many of them could work to produce sustainable products or perform much-needed services. Instead, we lose their productive potential and condemn them to often long-term unemployment.”

In the Eurozone, which is particularly affected by public austerity policies, the value of its lost annual production is calculated at 580 billion Euros. This is more than three times the gross domestic product of Portugal.

Link to Study.

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The World Future Council brings the interests of future generations to the centre of policy-making. Its up to 50 eminent members from around the globe have already successfully promoted change. The Council addresses challenges to our common future and provides decision makers with effective policy solutions. In close cooperation with civil society actors, parliamentarians, governments, business and international organizations the World Future Council identifies “best policies” around the globe. The World Future Council is registered as a charitable foundation in Hamburg, Germany.