Europe Seen Adding Growth to Budget Rules as Focus Shifts

[Ghost Dog]

Europe may add an annex to its budget treaty spelling out how countries can boost growth as the bloc shifts its emphasis on tackling the debt crisis, a German government official said...

...Euro leaders have struggled to find a common way to promote economic growth even as they have demanded budget cuts to satisfy German priorities and settle markets. At a March 2011 summit, they endorsed Merkel’s so-called competitiveness pact that set targets on issues including cutting labor costs and raising the retirement age.

Draghi used a speech in Brussels yesterday to urge European leaders to widen their crisis response beyond cutting debt and deficits, the goal of the German-led fiscal pact signed by euro- area leaders in March.

“We’ve had a fiscal compact,” Draghi said. “What is most present in my mind now is to have a growth compact.”

That may mean an announcement on European Investment Bank financing of region-wide infrastructure projects within a month, said Douglas Borthwick, managing director and head of foreign- exchange trading at Faros Trading LLC in Stamford, Connecticut.

/... http://www.bloomberg.com/news/2012-04-25/europe-shifts-crisis-focus-to-growth-as-merkel-backs-draghi-call.html

[unblock]

1. whaaaaa?? i thought europe was in the intractable grip of austeritosis!

knowing europe, this will not amount to much and it will be delayed.

but at this point any shift in dialog toward growth is a good start.

[Ghost Dog]

3. Well, there's also this from UK: UK in recession: Where is Osborne's Plan B?

Government's strategy for recovery under fire as UK returns to recession

Double dip has arrived – and Osborne is running out of escape routes

Pressure is mounting on the Coalition to reverse course on its strategy of spending cuts after the British economy officially slumped back into recession in the first three months of this year. Economists warned that George Osborne's plan for deficit reduction will damage any recovery over the coming years, with 90 per cent of the Chancellor's planned cuts still to be enacted.

There were signs yesterday that the Coalition's united stance on spending cuts was wavering. The former Liberal Democrat Treasury spokesman, Lord Oakeshott, who is close to the Business Secretary Vince Cable, described the cuts scheduled for this year as "self-harm". He said: "Five per cent more cuts are the last thing we need while the economy is flat on its back – that would simply be self-harm." He called for the Coalition to instead borrow more using the UK's record low interest rates to fund an ambitious national home-building programme...

/... http://www.independent.co.uk/news/uk/politics/uk-in-recession-where-is-osbornes-plan-b-7679248.html

There have been murmurings about a forthcoming 'surprise move' both market- and policy-wise in the Eurozone and perhaps wider Europe..

[xchrom]

2. du rec. nt

[elleng]

4. Good to hear that someone is at least MENTIONING growth.

The poor economists just don't know what to do.