"Even I believe countries have to pay their debts at some points," Mr. Posen said. "The question is the time sequencing and how you make credible commitments not to overdo it now, but not to underdo it later."
"For other countries, such as the U.S. and Germany, [austerity] is not good," Mr. Posen argued. "This is forcing them into premature tightenings and excessively speedy tightenings. The most important thing is that the international spillovers when everybody tightens up at the same time are quite large."