Why Europe's Austerity Regime Won't Change - by Rick Newman

The economists and politicians who argue that Europe (and the United States) need more emphasis on growth and less on punishing cutbacks are probably right. But that doesn't mean anything is going to change.


The recent election of socialist Francois Hollande as France's new president has generated speculation that a kinder, gentler reform program will emerge to bounce Europe out of its economic doldrums. Hollande campaigned for office by vowing to renegotiate a recent pact that set tight budget rules for all eurozone countries, and he'll soon meet with German Chancellor Angela Merkel to insist on a new deal that does more to stimulate spending and create jobs.

The other pressure point is Greece, where newly powerful leftist politicians have rejected some of the stiff tax hikes and sharp spending cuts other European nations insist upon as a condition of providing Greece bailout money. There's an increasingly real threat that Greece, its citizens reeling from pension cuts, tax hikes, and other austerity measures, could leave the eurozone over the matter, creating a messy default scenario that unnerves financial markets.

For more: Why Europe's Austerity Regime Won't Change - Rick Newman (usnews.com)