Main focus of Tuesday, June 8, 2010

Germany's model - and risky - austerity package

Germany's conservative-liberal government announced on Monday its plans to slash the federal budget by around 80 billion euros by 2014. European commentators write that while Chancellor Angela Merkel's austerity package serves as a model for the EU, it could jeopardise economic recovery in other states.

Virtuous plans

The German government has presented an ambitious austerity package, the liberal conservative daily Corriere della Sera opines: "The assignment from Berlin to the rest of Europe is fiscal discipline. But in fact for many European governments this is shock therapy. They see themselves forced to follow Berlin's example by aiming to comply with the Maastricht Stability Pact as quickly as possible again and even go beyond its criteria by paying off the deficit. Germany wants to dictate the standards for austerity packages. A culture of stability for everyone, runs the motto. Europe's most virtuous country has raised the benchmark and is pushing aside governments that have not yet introduced austerity packages." (08/06/2010)

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More from the press review on the subject » Fiscal Policy, » Germany, » Europe
All available articles from » Danilo Taino

A model for Portugal

The opposition and trade unions in Germany are harshly criticising the austerity programme presented by German Chancellor Angela Merkel. António Ribeiro Ferreira, however, praises the plans in the tabloid Correio da Manhã: "The German government wants to cut state expenditures by 80 billion euros by 2014. To achieve this it plans to cut public sector salaries, axe more than 15,000 civil service posts and freeze major public projects - all without raising taxes. A commendable example that is not being followed here in Portugal where taxes are being raised, little public spending parties are being thrown and we're getting into more debt building high-speed trains, new bridges across the Tejo and new airports. Merkel is doing everything to slim down the state, protect citizens and save the economy. Our would-be engineer [Prime Minister José Sócrates] is doing exactly the opposite. He is inflating the state, attacking the citizens and killing the economy in a crazy and criminal way." (08/06/2010)

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More from the press review on the subject » Economic Policy, » Germany, » Portugal
All available articles from » António Ribeiro Ferreira

German austerity measures jeopardise Spanish recovery

In reaction to the German government's extensive austerity plan the left-liberal daily El País fears negative consequences for Spain's economic recovery: "The German Chancellor Angela Merkel yesterday presented a convincing argument for why it was time for the most extensive austerity measures since World War II: 'You can't spend more than you've got.' The German government is ready to cut public expenditures by 80 bilion euros by 2014. ... However the European (and global) economy finds itself in a huge contradiction. If all states reduce their expenditures at the same time the European (and global) economy will be nipped in the bud. Spain is a good example: our chances of achieving economic growth through foreign trade dwindle as Germany cuts its costs." (08/06/2010)

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More from the press review on the subject » Domestic Policy, » Fiscal Policy, » Economic Policy, » Germany, » Spain, » Europe

Austerity time bomb

Germany's budget policy has exacerbated inequality in the Eurozone, writes the daily Der Standard: "The German propensity to hard work and self-deprivation has created the very global imbalances that rocked the international financial system and weakened the European common currency in the first place. Leading economists and Germany's trading partners have been saying this for years, most recently at the G20 planning meeting in South Korea. But the Germans - like the Chinese and Japanese who are also firmly bound up in mercantilist thinking - refuse to listen. Their fear of 'Greek circumstances' has led them to recreate these very circumstances. No one can force them to make an about-turn. Nevertheless the Germans themselves must foot the bill for the crisis, as the value of their financial assets dwindles and they are forced to stand surety for other people's debts." (08/06/2010)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Germany, » Europe
All available articles from » Eric Frey

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