This event took place about the same time as former German Chancellor Helmut Schmidt's warning against German "national egoism" in the euro crisis. (Warnung des Altkanzlers. Helmut Schmidt kritisiert deutschen "National-Egoismus"Spiegel Online 22.09.2012)
News of the failure of Frau Fritz' austerity program keeps coming. Portugal's conservative government agreed in the face of active public protests to ease up at least a bit on their austerity program. Greece's projected budget deficit is looking to be twice as big as previously projected. Cyprus is negotiating terms for a bailout which will bring down Angie's austerity guillotine on them, as well. Italy is raising its debt targets. Spain's conservative government wants to use the crisis and the terms of the new bailout which it hasn't formally requested yet to cut pensions.
Giles Tremlett reports for the Guardian in Spain braced for further austerity as Madrid prepares for bailout 09/23/2012:
Recession-hit Spaniards will this week be told to swallow yet more austerity as the government prepares a fresh round of reforms and another budget filled with spending cuts and tax increases that will allow it to seek a bailout from eurozone partners.What an awful mess Frau Fritz has created!
Pension freezes are also expected to form part of a raft measures to prepare the way for the European Central Bank (ECB) to give Spain support to control borrowing costs that will eat up a large chunk of next year's budget.
The budget is to be announced on Thursday, alongside the reform programme. Neither seemed likely to contain measures to immediately ease Spain's chronic 25% unemployment, which some analysts expect will rise to 26.5% next year.
In a disappointing moment, Daniel Cohn-Bendit, a major figure in the French Green Party and one of the legendary figures of the May-June uprising in 1968 in France, resigned from the French Green Party because they opposed the adoption of Frau Fritz' fiscal suicide pact, officially called the Intergovernmental Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union. French Greens' Cohn-Bendit quits party in fiscal pact row Reuters 09/23/2012)reports, "The French Greens voted overwhelmingly against the terms of the pact at a grassroots assembly on Saturday, concluding that it would not provide long-term answers to the EU crisis nor help foster environmentally friendly policies."
Cohn-Bendit is co-president of the Green Party caucus in the European Parliament, a position he will presumably have to relinquish now. I think Cohn-Bendit has been a constructive voice in his role in the European Parliament, and I hate to see him leave.
But his party in France took the right position on the treaty. Reuters reports:
The French Greens voted overwhelmingly against the terms of the pact at a grassroots assembly on Saturday, concluding that it would not provide long-term answers to the EU crisis nor help foster environmentally friendly policies.Hollande's Socialists should be embarrassed. The fiscal suicide pact fixes a major feature of Merkel's austerity policies permanent in the approving countries, an arbitrary limit on debt to 60% of GDP. To a significant degree, it would outlaw Keynesian counter-cyclical economic policies in recessions. It's just nuts to write that into constitutional law in any country.
France is expected to ratify the pact early next month, though a major revolt within the coalition could force the Socialists into an embarrassing reliance on the conservative opposition.
Tags: angela merkel, austerity economics, eu, euro, european union, france, françois hollande, greece, portugal, spain