When even the strongest of the eurozone economies fails to meet its budget cutting target, a person might assume that austerity may not be the answer. We’ll soon get a chance to find out if Germany’s failure to meet its proposed €11.2 billion in budget cuts changes Chancellor Angela Merkel’s austerity tune.
Germany managed to trim just €4.7 billion from its budget in the most recent fiscal year and has planned to cut €19.1 billion from its 2013 fiscal year budget. But according to Der Spiegel, the government has so far managed to agree on just a third of that amount.
Germany practically forced last month’s strict budget controls on the rest of the eurozone and its own failure to meet its announced goal could trigger an EU review of the country’s fiscal policy.
The report is sure to be embarrassing for Merkel, who has championed austerity and strict budgeting as the way to get the eurozone back on track. Now that Germany gets to taste the medicine it has been prescribing for Greece and the other eurozone debtors, we’ll find out if the prescription was the right one.
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