Romania Latest European Government to Collapse

The two-month old government of Romanian Prime Minister Mihai Ungureanu failed a no confidence vote today, forcing the President to name a third Prime Minister in a span of six months. The last prime minister, Emil Boc, resigned after violent anti-austerity protests in February. The no-confidence vote, spurred by bitterness over austerity measures as well as claims of corruption, contrasts with the government's dissolution in the Netherlands, where the Prime Minister resigned for failing to bring the budget deficit down to the EU mandated levels it sometimes seems only the Dutch are trying to get to.

A new European budget pact, ratified so far only by Greece and Portugal, two EU bailout recipients, re-enforces the 3% of GDP limit on annual deficits and 60% of GDP for national debt that very few EU countries presently meet.

The Czech Republic's government is expected to survive its own no-confidence vote later today. Meanwhile, in France, Socialist Francois Hollande's is leading President Sarkozy by up to 10 points in opinion polls, running on a promise to re-open the EU's budget pact. Angela Merkel dismissed the idea as impossible, setting up a political clash with the potential next French President.

Reason's Tim Cavanaugh explains the myths of European austerity.

Comments

[mr simple]

Looks like we could be seeing the end of the EU or at least the euro. Germany should at least back out and watch everyone else collapse in on themselves.

[Ken Shultz]

If the solution is a centralized EU wide approach to budgeting, then it seems unlikely that the member states are about to sign on to something like that--when various governments are falling because of local opinion on austerity measures.

I mean, if public opinion is such that various parliaments can't get a budget through, then why would anyone think the public would support deferring their budget considerations to the EU?

But we shouldn't underestimate the market's ability to inflict reality on these countries' budgets. With the markets turning the cheap credit spigot off, that may do enough quickly enough to keep the union together through this crisis.

The credit markets are punishing various countries' ability to borrow individually, i.e., and we shouldn't completely discount the effects of that.

Thank God for the markets. When various government fail to do the right thing, the credit markets will often do it for them. Eventually, the markets will force them to slash their budgets, but having that imposed on you involuntarily is an extremely painful process.

It's a good thing we don't have to worry about that ever happening to us here in the United States...

...since we're so very precious.

[mr simple]

Right? The EU can't even enforce its rules as currently written. Otherwise the euro zone would be contracting. But someday reality will catch up.

[Emmerson Biggins]

Are there any government that enforce their own rules as written?

[Concerned Citizen]

Huh, central banking on a grand scale fails. Who saw that coming?

[PS]

The Czechs may have a socialist bent and a lot of corruption, but they are pretty fiscally conservative when it comes to racking up public (or private) debt or printing money.

[Ken Shultz]

Sweden is like that, too.

They're socialist, but they're fiscally conservative.

They might tax the hell out of you, but they aren't running huge deficits.

The government budget has a surplus of 0.3 percent of GDP this year, projected to increase to 1.4 percent in 2012. Gross government debt is 45 percent of GDP and falling, compared to 101 percent and rising for the United States. In net terms, the Swedish government has financial assets that exceed its liabilities by 25 percent of GDP, compared to liabilities that exceed assets by 75 percent of GDP in the United States.

http://www.economonitor.com/do.....n-balance/

There are numerous reasons why what works in Sweden would never work here in the United States, but a conservative fiscal policy isn't one of the those things that wouldn't work.

[PS]

The Swedes have an advantage over the Czechs in that they are quite honest. This helps their huge bureaucracy to function fairly efficiently. Get rid of the socialism and they'd be like Singapore.

[Invisible Finger]

They might tax the hell out of you

They they sure the fuck ain't fiscally conservative. Keeping deficits low is not the definition of fiscally conservative.

[Ken Shultz]

Deficit?!

They don't have a deficit. They have a surplus.

If running a low deficit isn't fiscally conservative, then what about running a surplus?

[darius404]

Pssh! Not large enough, of course.

[Invisible Finger]

The last time Europe went commie, it helped the US economy greatly.

Only problem is we're trying to go commie faster than the bulk of Europe is. C'mon France, get those extreme socialists in already!!

[Zingotooo]

Sounds like a plan dude. Sometime you jsut have to throw your hands in the air and cry Whos your daddy?

http://www.Gotta-Be-Anon.tk

[marya]

My sister has a longchamp and she likes the Longchamp Bag very much. When people ask her why she likes her sac longchamp Bag so much, she just answers like that thee is no reason and because she likes my Longchamp Bag, so she likes it.