It is one thing to agree to something while under duress. It is quite another to do so from necessity.
Angela Merkel of Germany relented a bit on her stance of radical austerity for the eurozone’s weakest nations financially while at a G8 summit at Camp David. At least Obama hinted so. The joint statement issued after the meeting said the group believes that some support of growth must be married with budget cuts in nations that include Spain, Portugal and Greece. Otherwise some economies in the region could fall into depressions.
But Merkel is home in Germany now. She faces national elections in 2013. Her ruling coalition already has lost several important state elections. Polls show German voters are mostly violently opposed to funding more financial support for their neighbors, some of which have dropped back into recession and have unemployment rates over 20%.
She also can take what Obama says with a grain of salt. He has not been able to get austerity forces in Congress to move even a little toward his pro-growth stance. And that will not change before the November elections. His growth programs could even cost him the election if voter fears over the U.S. deficit are great enough.
Douglas A. McIntyre
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