Punish the deficit deviants

The mountains of debt run up by Portugal, Ireland, Greece and Spain, the so-called PIIGS, are undermining confidence in the euro. Harsh words won't be enough, writes Carla Joosten in her blog for conservative-liberal news magazine Elsevier: "The deficits of the PIIGS are not just a consequence of the crisis, but also of poor budget management. For too long they lived beyond their means, blew all their profits on low interest rates and failed to introduce reforms, with the result that they now threaten to cause problems for Europe as a whole. These countries deserve unsparing treatment. ... If we survive this storm the heads of government should take a close look at the mentality that should prevail in a monetary union: They should ensure that their own budgets are in an orderly state to prevent damage to other budgets. You don't need a political union for this end, simply the application of tougher budgetary rules. Real sanctions; not the lectures being doled out by Brussels at present."

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