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Thread: Merkel losing on austerity

  1. #1
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    Default Merkel losing on austerity

    http://www.businessinsider.com/devel...sterity-2012-4

    -snip-
    Sorry Angela, The Jig Is Up

    Let's hope this article by Nicolas Kulish at The New York Times (via Morning Money) represents a turning point in the European crisis.

    It's all about how finally, it seems, there's a serious counter-weight to the German idea that austerity is the only way forward.

    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.”

    ...

    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.

    In thinking about it this way, this certainly puts a very positive light on the developments of this weekend, where right-wingers in the Netherlands and France stunned the political establishment. And in fact in France, both of the remaining candidates (Hollande and Sarkozy) are pushing back against Germany. Hollande explicitly wants Eurobonds, and a renegotiation of the fiscal compact. Sarkozy has been talking lately about having the ECB do more, a specific rebuke of the German hard money ideal.

    The fact of the matter is that not only has austerity not worked, and not only has austerity been devastating to the economy, austerity has exacerbated the very problem it was meant to address, which is sovereign debt dynamics.

    The most glaring example of this is in Spain, where yields really started to spike in the wake of reform announcements.

    The isolation of Germany was probably inevitable if only looking at this chart of PMIs across Europe.

    Read more: http://www.businessinsider.com/devel...#ixzz1t7M59sXK

    -snip-

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    Default Re: Merkel losing on austerity

    where right-wingers in the Netherlands and France stunned the political establishment
    I have deliberately refrained from making any references to this development, but since you brought it up ...

    (snip)"So the big story to come out of the French election yesterday was the strong showing of right-winger Marine Le-Pen, the anti-immigrant Euroskeptic who came in 3rd place.

    She won't be in the runoff vote, but because she (theoretically) represents a large bloc of conservative voters, people expect Sarkozy to tack in her direction between now and the runoff on May 6.

    But regardless of the way the May 6 election goes, or how Sarkozy panders between now and then, that's not really the big issue.

    The big issue is that Marine Le-Pen was wildly popular among youth voters according to pre-election polls. According to one poll in early April, Le-Pen was winning among 18-24 year old voters.(snip)

    from


    I'll also provide another link without additional comment to illustrate how significant Le Pen's surprisingly positive election showing actually was ...


    .... meanwhile, over in Holland ...

    (snip}Dutch Prime Minister Mark Rutte has tendered his government's resignation to Queen Beatrix after the collapse of a parliamentary agreement with a far-right party.

    The resignation had been expected since the weekend when Rutte admitted that his Government's rift with the Freedom Party would likely lead to early elections.

    While not part of the ruling coalition, Anti-Islam politician Geert Wilders party had guaranteed the government's majority for the last 18 months by agreeing to support it in parliament.

    That arrangement ended following the collapse of talks on new austerity measures.(snip)

    from )


    Trying to stay on the economic side, the recent rise of Le Pen and Wilders is arguably tied to younger europeans beginning to take serious notice that their countries' past spending habits have endangered their future opportunities. Le Pen and Wilders both propose to deal with the problem via greatly reduced future gov't spending ... beginning by deporting 'non-productive' immigrants who create much higher costs for their countries gov'ts than they provide in tax revenues and/or economic productivity.

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    Default Re: Merkel losing on austerity

    According to the article linked to, in my post above,

    http://www.businessinsider.com/geert...-europe-2012-4

    Geert Wilders opposed the government because he was against the steep cuts being proposed.

    -snip-
    Wilders walked out of the talks on Saturday saying his party "could not live up to" European Union demands, arguing that the cuts aimed at steering The Netherlands back within EU deficit targets would hit the elderly the hardest.
    -snip-

  4. #4
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    Default Re: Merkel losing on austerity

    ^^^ true but not the only point ... from

    (snip)"Reporting Central and Eastern Europeans

    Since May 1, 2007 there is free movement of workers between the Netherlands and eight countries in Central and Eastern Europe (CEE) countries. At present the estimates to the number of people from these countries, which resides in the Netherlands, apart from 200,000 to 350,000 people. As one of the few parties, the Freedom Party from the beginning against the opening of the labor market to Poland and other CEE nationals. Given all the problems associated with the massive arrival of especially Poland, is that attitude materialized. Recently, the PVV whatsoever against further opening of the labor market for Romanians and Bulgarians voted.

    This massive labor migration leads to many problems, nuisance, pollution, displacement and integration in the labor and housing problems. For many people, these things a serious problem. Complaints are often not reported, because the idea that nothing is done."(snip)

    ... obviously, Wilders' efforts to keep eastern european immigrants and muslim immigrants out of the Dutch labor market was not targeted at Dutch retirees, but towards younger Dutch who face both increasing tax rates and increased difficulty in obtaining jobs. Le Pen is essentially presenting the same 'case' to France's younger unemployed. And unlike the USA, where the unemployment rate for young Americans is a relatively 'recent' phenomenon ( cue recent announcement that 50% of this year's college graduates will wind up unemployed / underemployed ), the unemployment rate for young Western Europeans has been rising for several years now since the Schengen treaty was signed and low wage immigrant workers from Eastern Europe / Northern Africa began arriving in Western European countries in droves to legally compete for the limited number of available 'entry level' jobs.
    Last edited by Melonie; 04-26-2012 at 03:45 PM.

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