The Euro crisis lingers on 22nd January 2012
The first month of 2012 has seen the Euro Zone take a battering, beginning with a leading debt rating agency, Standard and Poor’s downgrading the French triple A rating. The Euro crisis, lingers on. Several of the countries within the Euro zone are in huge amounts of debt. The end of January sees these countries coming together at a summit to decide of Angela Merkel’s fiscal compact of which Britain through David Cameron has exited. Italy and Greece are the countries to watch, to see how their debt will be restructured, symptoms of a right wing fiscal policy that is starving off the potential for growth. Italy for example is going deeper into recession because both public and private spending is being cut. Spending from the public falls as they face ever growing bills and the austerity measures not delivering real benefits.
The view that a rigid focus on austerity is not the answer was echoed by Standard and Poor’s analysis of the reason why they had downgraded many EU countries. S&P one of the most respected credit agencies, speaks an inconvenient truth, when it criticized European leaders for focusing too much on cutting debts and not sufficiently on competitiveness and growth. The fact that many of the European countries are still in deep recession demonstrate that strict budgetary measures, without economic activity does not result in growth.
However Germany shows no sign of pushing for anything other than self defeating deficit cuts. Labour’s five point plan for jobs and growth is a credible alternative, which provides real stimulus for growth, alongside facing the realities of measured budget cuts. It is only progressive values, such as this plan, which will allow Europe to turn the tide on the recessions throughout many of its member states.