LESSONS learned during the Asian financial crisis show Europe must embrace both growth and austerity if it is to recover from it current economic woes, the World Bank said Thursday.
Sri Mulyani Indrawati, the bank's managing director and a former Indonesian finance minister, said it was "false" to debate whether one is a better tool than the other in tackling the continent's current malaise.
"The recent elections in Europe have ignited debates whether austerity or growth is more appropriate for Europe at this time. This is a false debate. One is needed for the other," she told a private forum on the Asian economy.
"I speak from my experience," she said, adding that Indonesia implemented painful reforms before emerging out of the regional currency crisis in the late 1990s.
"When Indonesia was suffering from confidence trauma, (we saw) you really have to show something, (some) policy gesture, that can restore confidence before you can think about strategy for growth," she said.
Much of Asia was gripped by crisis in the late 1990s that sent the value of currencies plunging as stock markets bottomed amid ballooning debt.
Europe, which has struggled to tame its debt crisis, has seen voters in France and Greece oust conservative leaders who pushed for tough austerity measures and in France elect one who has stressed growth.