Southern Europe digs in against further austerity, as IMF calls for relief - by Andrés Cala

The players in Europe's economic crisis look increasingly deadlocked, as ailing countries in the south – with support this week from the International Monetary Fund – rebel against further deficit-cutting measures advocated by the wealthier nations to the north.

At the heart of the rebellion is Spain. The conservative government of Mariano Rajoy, which is negotiating an extension to its unreachable deficit targets with the EU, is vocally rejecting European Commission pressure to impose more austerity, from tax increases to public sector cuts.

Rather, Spain wants its partners to do more at the regional level to stimulate growth by easing targets and relaxing austerity rather than simply to be dictated to by northern lenders, led by Germany.

Ultimately, the ability of the EU to balance conflicting forces will determine the pace of Europe’s recovery. But many are aware that conflicting priorities – and intervening politics – mean it's unlikely that much meaningful action will be taken and the waiting

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