Eurozone governments are assessing what value austerity measures are actually offering to the economy. According to new Eurozone reports, many people have started to question the effectiveness of the austerity measures being imposed on EU nations. German chancellor Angela Merkel has pledged that austerity measures be made into law.
The move towards austerity was viewed as the single best solution to bring the debt crisis in the eurozone under control. For a while, only debt-laden nations such as Greece, Spain, Portugal and Italy disagreed. However, more eurozone nations are starting to question the viability of austerity.
France has been Germany’s ally in trying to beat the other Eurozone countries into shape. They have supported Germany’s movement to impose austerity onto other Eurozone nations. However, France has recently changed its opinion on the best way to encourage an economic recovery. France prime minister front-runner François Hollande has stated that countries drowning in debt should focus on expanding their GDP through increased government spending. Hollande said that austerity measures have created a number of new concerns for the people of the Eurozone. Budget cuts and lowering the minimum wage has triggered despair and riots throughout Europe.
The Dutch government collapsed the same day Hollande went on record. The Dutch prime minister and his cabinet were unable to pass a budget. The entire cabinet of the Netherlands has resigned following that announcement.
The Eurozone is facing a greater dilemma than before. They now are struggling to assess how they are going to overcome the debt crisis. However, unless the nations of the Eurozone can agree on the best way to resolve the debt crisis, they will have a hard time making any progress.
Opposition to austerity continues to grow as nations find it too difficult to meet deficit reduction goals. Spain failed to meet their target a couple of weeks ago. Also, Greek citizens are starting to really feel the pinch and are rioting against the austerity measures that have been imposed on them in recent months. Although politicians are desperate for a solution to mounting levels of sovereign debt, they are also trying to find a solution that doesn’t create social unrest or suffering for their citizens. Hollande states that the austerity measures are doing just that.