BRUSSELS | By Alexandre Mato | Today’s Eurogroup meeting and the Ecofin on Tuesday will focus on French budgetary problems. Moreover, Luxembourg will raise the issue about the investment gap in Europe. After 5 years of austerity, the European Commission is trying to pursue an economic policy change in the last few weeks that will move towards a focused on greater growth.
SAO PAOLO | By Marcus Nunces via Historinhas |Matt O´Brien has gone over to the “dark side” writing “Why is the recovery so weak? It’s the austerity, stupid.”: Welcome to Austerity U.S.A., where the deficit is back below 3 percent of GDP and growth is still disappointing—which aren’t unrelated facts. It started when the stimulus ran out. Then state and local governments had to balance their budgets amidst a still-weak economy. And finally, there was the debt ceiling deal with its staggered $2.1 trillion of cuts over the next decade.
MADRID | The Corner | The economy is stagnant, the confidence of businesses and consumers continues to decline and unemployment is touching new highs. France is being forced to carry out reforms from all sides, hence François Hollande and Manuel Valls have chosen the social democrat Emmanuel Macron as Minister of Economy, confirming their willingness to pursue the economic reform agenda.
FRANKFURT | By Lidia Conde | Is austerity at all costs killing us? Germany answers with a resounding “no.” Even though the North-South axis in the European policy is more present than ever, for Berlin “austerity does not punish.” On the contrary: it even purifies. Furthermore, the Stability Pact offers enough flexibility so as to boost growth. There is no room for revision or debate.
ATHENS | By Nick Malkoutzis via MacroPolis | The May 25 result should have been a watershed moment, prompting Greece’s decision makers to seriously contemplate the mistakes that have fed the extremist monster: implementing drastic austerity while ignoring the social safety net, engaging in relentless artificial political polarisation, ignoring education, treating immigration with malevolent neglect, undermining institutions, snubbing justice and, when all else failed, attempting to cosy up to Golden Dawn and adopt some of its agenda.
MADRID | By Álex García.
MADRID | By Luis Arroyo | Despite Italy’s PM Matteo Renzi is the only one fighting the hard EU economic line, Italian public debt reaches 135% of GDP. The country is required by the fiscal compact to return to 60% in 20 years, which would involve perpetual austerity for an entire generation at least. However, the problem does not only affect Italy but all the European Southern countries.
The Corner Analysis | In the grim day in which the French National Front victory broke the expectations of a more united and strong Europe, Spaniards broke the bipartisan establishment for the first time in 35 years. Podemos, born from the Indignados (outraged) movement, was the biggest surprise in the political arena. Voters weary of austerity measures and corruption also punished the political establishment in Greece. Eurosceptics and xenophobe movements dangerously gained strenght in Denmark, Austria, Finland and the UK.
MADRID | By Luis Arroyo | There was a deflation period in Europe at the peak of the crisis in 2008-2010. Demand policies all around the world erased it and prices increased to 3% annual rate. Then, the resulting austerity policies brought us back to deflation.
MADRID | By Luis Arroyo | Monetary policy has worked in the countries which have implemented it without feeling ashamed. The US, UK, Japan or even Switzerland have reactivated their economies and diminished wealth imbalances, at least in comparison with the euro zone. However it is also truth that QE efficiency has performed poorly.