Member area

OECD debt report promotes a return to austerity

07 March 2024

In drawing a very disturbing picture of high global debt made unmanageable by high interest rates at a time when borrowing needs for the future are higher than ever, the OECD makes the very controversial claim that “Government spending needs to be highly targeted and focus more on investment in areas that drive productivity increases and sustainable growth.”

TUAC believes that the OECD is mistaken in presenting its Global Debt report, by putting so much emphasis on

  • debt as such without considering how the money is spend and the benefits it generates,
  • highly targeted Government spending which suggests cutting public services and a return to austerity,
  • debt markets for investment needs when central banks could provide the fiscal space for governments to invest in the green transition, digitalisation and resilient supply chains (were it not for the quantitative tightening advocated by the OECD),
  • reducing debt without considering how to raise revenue, such as through taxation of financial transactions, excess profits and the super-rich.

“People will not accept cuts in for example care or health services for the elderly just because they do not increase productivity. Public services are not just about driving productivity increases, they are about caring for the needs of citizens.”

— Veronica Nilsson, General Secretary of TUAC

“Central banks played a major role in helping Governments to save lives, jobs and businesses during COVID and are needed even more to finance climate action towards a net zero economy. This transition cannot be at the expense of the basic needs of working people and their families and communities.”

“Austerity will not reduce debt ratios, but rather push economies into recession and hold back investment not only in climate action but also infrastructure for the digital revolution.


“Policy makers cannot rely on economic orthodoxy when faced with tackling climate change and the rampant inequality growing across the world. Monetary and fiscal policy need to work together to finance services and urgent long-term priorities such as climate action.”

— Veronica Nilsson, General Secretary, TUAC

The OECD has frequently acknowledged that social protection needs to be improved in many countries – notably and recently in its 2023 Latin America Economic Outlook –  and OECD Health Ministers recently committed to strengthen health care systems and improve the working conditions of health and care workers.

For more on OECD Global Debt report