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Voters can only stall euro zone's austerity reality
The National - 09 May, 2012 The problem with temporary solutions is that they're temporary.
At the height of the financial crisis in April 2009, the European Union ordered Greece, Ireland, Spain and France to rein in budget deficits. Since then, Greece in particular has walked a tightrope, cutting spending and raising taxes, and awaiting a public revolt against those painful policies.
On Sunday, Greece toppled off that tightrope. As had been widely predicted, most voters rejected the two main parties, one on the centre-left and one on the centre-right, both of which support austerity measures.
The result is not a new crisis for the euro zone (and for the world economy) but rather a new chapter in the continuing crisis. Demands for renegotiation of Greece's deal, and for a return to deficit spending elsewhere, can be expected to generate more turbulence, more frantic bargaining, more "firewalls", more late-night announcements. Will Greece abandon the euro? Will the EU abandon Greece?
These questions, though gripping, are the wrong ones to be asking. The real question was posed this week by Alexander Graf Lambsdorff, a German member of the European Parliament: how can Europe, and the world, move "away from a culture of excessive state debt to a culture of balanced budgets, which we could also call a culture of stability"?
Voters naturally resent the end of the deficit binge that provided Greece - and all of Europe, even Germany - a cornucopia of social benefits and easy money. The Greeks were not alone last weekend: France elected a Socialist president who has promised a return to the good old days. Even German voters, in a regional election, punished supporters of budget stability.
"Austerity can no longer be inevitable," said France's president-elect François Hollande on Sunday. It's a popular sentiment that won him an election, but he is wrong. If governments won't balance budgets, borrowing rates will skyrocket and they will face the same crisis that now troubles the Greeks. No country can simply vote itself out of debt.
Mr Hollande, who will meet Germany's Chancellor Angela Merkel next week, campaigned on renegotiating March's 25-country austerity deal, which Ms Merkel supports. Both Paris and Berlin have since made friendly noises about possible compromise, but there is a basic disagreement at the heart of the euro zone. There is, to be blunt, more at stake than Greece's bailout package.
EU states have repeatedly promised to balance their budgets, but not even Germany has done so. Sunday's elections may force some difficult decisions, but until voters grasp that massive debt is more a problem than a solution, we can expect only more chapters in this lamentable story. |
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| Int'l shipping line "Evergreen" launches its trips to Aden port |
| Source : Yemen News Agency |
| Date : 2013-05-21 |
| Taiwan's international shipping line "Evergreen" is to launch its trips to the container port in Aden starting from tomorrow Wednesday, by receiving the Liberian ship Santa Bijeljina in the first... |
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| Earthquake effect set to be probed |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Seismic activity near Bahrain and its effect on structural design will be discussed during an event at the Bahrain Society of Engineers tonight.... |
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| Royal visit will stay forever in the minds of all workers |
| Source : Oman Daily Observer |
| Date : 2013-05-21 |
| The Royal visit of His Majesty Sultan Qaboos to Petroleum Development Oman (PDO) has deep and great connotations and significance, on many levels and fronts, due to the importance of... |
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| Shura vows to rescue budget |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Bahrain's Shura Council has vowed to rescue the country's national budget, including financial concessions that benefit 350,000 Bahrainis, after MPs effectively threw it on the scrap heap last week.... |
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| Oil 'quake' much ado about nothing |
| Source : Arab Times |
| Date : 2013-05-21 |
| Did the oil sector witness a real storm of change for the better or just a tempest in the teapot? In a situation where there is no change in the... |
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| Survey reveals health habits |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| A health survey in Bahrain has found that only half of those questioned (52 per cent) eat the recommended three meals a day, while one in five Bahrainis never do... |
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| Boost for tourism |
| Source : Oman Tribune |
| Date : 2013-05-21 |
| Approval of a master plan to develop Port Sultan Qaboos into a dedicated tourist hub highlights government’s initiatives aimed at expanding facilities for visitors, and thereby giving this vital economic... |
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| Schneider Electric strives towards a greener Saudia |
| Source : Saudi Gazette |
| Date : 2013-05-21 |
| Schneider Electric, a global enterprise in the field of energy management, unveiled their plans for a more eco-friendly Kingdom at a press conference at their Xperience Efficiency event on Monday.... |
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| Buhair Valley digging work halted |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Plans for an upcoming housing project could be reviewed due to environmental and health concerns, it has emerged.... |
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| India eyes 100,000 Saudis a year |
| Source : Saudi Gazette |
| Date : 2013-05-21 |
| Parvez Dewan, Secretary of India’s Ministry of Tourism, said that the number of Saudi tourists visiting India last year was around 26,000, a growth of over 12 percent compared to... |
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| Clean-up drive |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| A major environmental campaign to clean up Bahrain's capital, Manama, was launched yesterday.... |
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| Digital financial reporting through XBRL is the future |
| Source : Saudi Gazette |
| Date : 2013-05-21 |
| Digital Financial Reporting through XBRL (Extensible Business Reporting Language) will be the tool with which finance executives worldwide would be doing their daily reporting in future, this was stated by... |
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| Arab Energy Efficiency Day: Need to raise public awareness |
| Source : Saudi Gazette |
| Date : 2013-05-21 |
| The Arab world is celebrating Arab Energy Efficiency Day today. The Arab Ministerial Council for Electricity has set aside May 21 each year as the day for the Arab... |
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| Bechtel to assist in building work force at Jubail RC |
| Source : Saudi Gazette |
| Date : 2013-05-21 |
| Prince Saud Bin Abdullah Bin Thunayan Al Saud, Chairman of Royal Commission for Jubail and Yanbu, received Rilly P. Bechtel, President, Chief Executive Officer, and Director of Bechtel Group, Inc.... |
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| Food inflation in kingdom hits 6.2% |
| Source : Arab News |
| Date : 2013-05-21 |
| Food prices are the single largest contributor to overall inflation in Saudi Arabia, according to a recent report issued by Jadwa Investment.... |
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| Aramco invites bids for plant |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Saudi Aramco has invited bids for the construction of a 2,400 megawatt power plant in Jizan, near a 400,000 barrel-per-day oil refinery which it is currently building, two industry sources... |
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| 9 million benefit from land grants |
| Source : Arab News |
| Date : 2013-05-21 |
| The Ministry of Municipal and Rural Affairs has issued more than 1.5 million residential grants, which have benefited around 9 million Saudis. An average of 60,000 grants are distributed each... |
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| Board appointed |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Bahrain Mumtalakat Holding Company yesterday announced the appointment of a new board at the Bahrain Airport Company (BAC).... |
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| Top officials are replaced by Kuwait |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Kuwait's vital oil sector has undergone a major reshuffle, with new executives appointed for the subsidiaries of Kuwait Petroleum Corporation, after a new KPC chief was named, the national oil... |
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| Taqa mulls stocks options |
| Source : Gulf Daily News |
| Date : 2013-05-21 |
| Abu Dhabi National Energy Company (Taqa) yesterday said it was looking at ways to improve the liquidity of its shares but had not taken any steps to remove a barrier... |
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| Total 469 Results in 24
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