With political allies weakened or ousted, Chancellor Angela Merkel’s seat at the head of the European table has become much less comfortable, as a reckoning with Germany’s insistence on lock-step austerity appears to have begun.
“The formula is not working, and everyone is now talking about whether austerity is the only solution,” said Jordi Vaquer i Fanés, a political scientist and director of the Barcelona Center for International Affairs in Spain. “Does this mean that Merkel has lost completely? No. But it does mean that the very nature of the debate about the euro-zone crisis is changing.”
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From trading floors to polling stations to the streets of cities across Europe, the message appears increasingly to be that countries cannot cut their way to fiscal health. They need growth, too. In recent months, powerful voices have joined the chorus, including those of the managing director of the International Monetary Fund, Christine Lagarde, and Italy’s prime minister, Mario Monti. Treasury Secretary Timothy F. Geithner has called repeatedly for Europe to defer budget cutting in favor of some form of stimulus spending.Source: Business Insider
There are signs of growing dissatisfaction in Europe over the austerity measures pushed by Germany and other countries to solve the euro-zone debt crisis. But German editorialists bristle on Thursday at calls to stimulate growth and a proposal to let the ECB lend directly to banks in trouble.
Leaders across Europe continued to struggle Thursday with backlash against the largely German-driven austerity measures imposed as a result of the ongoing euro zone debt crisis.
Source: Spiegel
