Europe Swings Away From Austerity

The austerity versus demand debate is intensifying in Europe and momentum is moving EU countries away from austerity, the approach that has for several years dominated Europe's attempt to address its economic crisis. On Oct. 15, EU members submitted their 2015 budgets to the European Commission for approval. The run-up to the unveiling of the new budgets has been controversial. France and Italy announced in advance that they would not meet the targets that they had committed to in previous agreements with the commission. Though Germany proudly published its first balanced budget since 1969, it did so amid intensifying international criticism that Berlin's austerity measures are stifling Europe and that the country should instead seek to stimulate growth through increased investment and looser fiscal policy. Eventually, Germany will recognize that increased spending would be better for all parties, but a change of direction is not imminent. In the meantime, Germany and its austerity policies will continue to attract criticism from all sides, isolating Europe's most powerful player.