Best of the Blogs – 31 January 2012
The Baltic States and Ireland are not a model for Italy and Spain
This article by Simon Tilford of the Centre for European Reform discusses the use of “expansionary fiscal consolidation” during the economic depressions of Latvia, Estonia, Lithuania, and Ireland and its perceived results. It argues that although the economies have somewhat recovered, it is in large part due to a decrease in domestic demand. However, a similar collapse in demand of the 30% share that Italy and Spain hold together would “impose a huge demand shock on the entire European economy”. In addition, the Baltic States and Ireland face mass unemployment and ballooning emigration. Tilford recommends that policy makes should demonstrate the slump in domestic demand would affect their governments and banks, as well as explain how the whole European economy would cope with the resulting economic shock.
New President gives the European Parliament a new image
Lucy Hatton’s article in the Civitas blog examines the controversy resulting from the election of German MEP Martin Schulz as the new president of the European Parliament. Though the vote on Tuesday ended in his decisive victory, an agreement was made in 2009 behind closed doors between the two largest party groups in the EP – the European People’s Party and the Socialists and Democrats – to split the five-year term between them. Schulz has already made controversial decisions, such as outlining his commitment to things such as reducing the number of “background deals” in his acceptance speech and declaring his intention to bring politics back to the role of president. His election is also noted as a significant character shift from the former president and apprehension as to exactly where he will take the EP during his two and a half years in office.
Fifth Time Lucky?
By Open Europe
In this blog post by Open Europe, the fiscal treaty on budgetary discipline, discussed during Monday’s meeting of the EU leaders, is addressed. In its fifth and hopefully last form, the treaty includes a few interesting changes, such as new balanced budget targets, several changes to European Court of Justice’s fines, and the process of admitting countries into the agreement at a later stage. Most of the changes were made to convince remaining holdouts to sign while keeping the core of the treaty as it was. This latest version also allows for some of the fines to go into the EU’s budget, which would then be distributed out into the eurozone countries.
Foreign Language Blogs
The Eurozone does not Fulfill the Criteria for its own Membership
The Centre for Liberal Strategies reports in this blog that Bulgaria satisfied 4 of the 5 criterion for eurozone membership in December 2011. However, at the same time many of the 27 eurozone countries fulfilled even fewer, and to a lesser degree. The author points out that Cyprus and Portugal did not complete any of the criteria for membership, five others carried out only one, and one of the requirements has a 90% failure rate. In fact, according to the provided statistics, only Finland fulfilled all of the standards. This goes to show the decline thatEuropehas taken as a whole, and how they must help each other if they want to recover.
Click here for more information (in Bulgarian)