Europe Eases The Austerity Whip _ A Little
"We are all fully conscious of the debate, the mounting frustrations and even despair of people," said Herman Van Rompuy, president of the European Council, after the meeting ended.
"We also know there are no easy answers."
With unemployment at a record 11.9 percent and Europeans expressing their discontent at the polls and in the streets, many of the region's political and financial leaders are willing to postpone budget-cutting and deficit targets.
A few recent examples:â¿¿ EU officials have hinted Spain, France, Portugal and Greece might be allowed more time to reduce their deficits to within the limits specified by European Union rules. â¿¿ European finance ministers last week agreed in principle to grant Ireland and Portugal more time to repay bailout loans to other eurozone countries. While the countries cannot abandon deficit-reduction plans they agreed to in return for loans, it does allow them to cut budgets more slowly. â¿¿ ECB President Mario Draghi last week urged indebted governments to move beyond spending cuts and tax hikes and introduce labor reforms and other measures that would boost growth and reduce the "tragedy" of unemployment. The rethinking of austerity gained momentum late last year after economists at the International Monetary Fund produced research that showed Europe's austerity policies had been far more damaging than policymakers thought. It's hardly news to Ines Mendes of Lisbon, a 26-year-old flight attendant and mother of a 4-year-old. She said income tax hikes this year will cost her and her partner the equivalent of more than a month's pay each over the year, further squeezing her family budget. "We could really use a break," Mendes said. "I don't know why they're doing this to us. It doesn't make sense, it's just killing our economy," she said of the EU's austerity demands imposed as part of the country's 2010 bailout.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV