MADRID | This year, the budget cut therapy ordered by Brussels upon the euro area’s weakest economies will have to pass an exam in Dublin. If the Irish economy burdens itself with more public debt while missing growth, the failure could make current European Union policies untenable.
AMSTERDAM | Presseurop.eu | By Melvyn Krauss | The last minute negotiations in Washington to avoid a budget shortfall show that short-termism is well grounded in US politics. And by contrast, it shows that despite her controversial handling of the euro crisis, the German chancellor is wise enough to instead push for long-term solutions.
In the latest national opinion survey, Spaniards told the Rajoy government to close the nationalism front and weigh in with all resources to sort out the economy.
Deficit per GDP reduction in cold blood increases the debt per GDP ratio. We have been there, already. The sensible thing to do is to finance economic growth to shorten the deficit, even if it prolongs for a certain period the increase of debt.
Spain needs technical but also political assistance to redress the hesitant and often deficient action of the current government. Even if backed by an overall majority in Parliament, the government seems unable to offer a solvent alternative.
If Mario Monti achieves his goal and sits again as the prime minister of Italy, the message sent to the rest of the periphery will be one of great uncertainty and suspicion: lack of democracy and national accountability will not spark popular support to reforms, but most probably the opposite.
Although Ireland’s economy seems to be improving, Barclays warned that fiscal adjustments hit employment figures and disposable income.
Inflation in the euro area falls by 0.1 percentage points to 2.5% year-on-year. CaixaBank analysts predict a downward slide in inflation over the coming months.
A eurozone’s press review of the coverage about the banking union project gives a crystal picture of the mess: the division is growing between Germany’s position and the rest of its currency area partners.
Concerning the total trade of member states, the largest surplus was observed in Germany, followed by the Netherlands and Ireland. The United Kingdom registered the largest deficit.