Spain’s surpassing of the 6m unemployed mark on Thursday added fuel to the debate. But even in Germany, the austerity police of the eurozone, cracks are beginning to show ahead of the elections with the emergence of an anti-euro party.
a) Are there any austerians left? Yes. Here are some of them.
-UK: Chancellor George Osborne hit back at criticism over his apparent excessive austerity by claiming there is no other alternative. And after a tough week when he was criticised by the IMF over the excessive pace of his austerity programme, this week has brought better fortunes for his stance as figures showed a lower deficit and the economy expanded 0.3 per cent in the first quarter.
- Germany: Chancellor Angela Merkel’s view as articulated this week couldn’t be clearer: “I call it balancing the budget. Everyone else is using this term austerity. That makes it sound like something truly evil.” Germany is the only eurozone country with a 2012 budget surplus.
- US: The situation here is different because of sequestration, which triggered automatic spending cuts and tax rises. And the White House faces a July deadline to raise the borrowing limit or default on its debt.
- Latvia: The tiny Baltic state is emerging from a state of uber austerity – part of its bid to join the euro later this year – and it could end up being seen as a poster child for successful deficit cutting implementation, with real growth of more than 5 per cent in 2011 and 2012, despite the broader recession in Europe.
- Spain: The push by Europe’s fourth-largest economy to cut spending and raise taxes has led to record unemployment topping 6m for the first time in its recent history. The government of Mariano Rajoy announced economic reforms and structural measures on Friday.
- Italy: The technocrat government of Mario Monti has been steadfast in carrying out fiscal consolidation. All eyes will be on Mr Letta, who has already said: “Europe’s policy of austerity is no longer sufficient”. Read more
If commodities exporters were pinning hopes on an acceleration in Chinese growth, Monday was not a good start to the week. The disappointing gross domestic product statistics for the first quarter give the likes of Australia, Brazil and Indonesia plenty to be worried about.
As one investor put it: “For the global economy this data is bad news. Commodity exporters are screwed (especially those needing exports to China as key component). I would be very worried about places like Brazil, Indonesia, Australia and the like. The current level of GDP growth in China is OK with China but not OK for the currencies above.” Read more
Two days is apparently not enough for all the talking that needs to be done, so here we are entering Davos Day Three. But as our morning reading shows, there are some worries that delegates are not ready yet to discuss.
As our colleagues in the mountains don boots, bobble hats and gloves for day two of Davos, here’s some reading material from the comfort of the FT’s London office to help you limber up for Thursday’s talk-fest.
The World Economic Forum’s 43rd annual shindig is kicking off in Davos this morning and to get you started ahead of our live blog, here’s some reading to accompany your morning coffee. You’ll find all the FT pieces on our WEF page. And here’s the WEF home page. Enjoy.
As if concerns over whether Syria’s chemical weapons might fall into the wrong hands amid the increasingly violent civil war weren’t enough to worry about, behind the scenes nuclear experts are now expressing fresh fears over the security of what may be 50 tonnes of unenriched uranium in the country.
As the FT’s diplomatic editor James Blitz reported on Wednesday, concerns centre on the whereabouts of this as yet unconfirmed stash. It is believed by some to have been meant for Syria’s supposed al-Kibar nuclear facility – before Israel destroyed it in a secret mission back in September 2007, a mission that David Makovsky dissected in the New Yorker last September.
For its part, Syria has always denied ever having a nuclear programme. So, did it have one or not? Below are some interesting articles that wade into these extremely murky waters. Read more
Controversy has swirled around the candidacy of Chuck Hagel as secretary of defence, centred on past comments the Republican former senator made about the “Jewish lobby” intimidating congress, sanctions and military action against Iran, and the Pentagon budget.
Fallows uses a headline from the US satirical news website The Onion to suggest that the imminent nomination could be a “this is bullshit” (‘this’ being the campaign against Hagel) moment for President Barack Obama.
Commentary fiercely critical of the nomination has been published, among others, in the neo-con Weekly Standard, citing a top Republican Senate aide emailing: “Send us Hagel and we will make sure every American knows he is an anti-Semite.” In the Wall Street Journal, Brett Stephens also aired his disapproval at Hagel’s perceived prejudices against the Jewish community.
Gen David Petraeus and his wife Holly walk into a Senate hearing, watched by amongst others PAula Broadwell (seated). (AFP)
It’s not everyday that serious newspapers get to combine sex, spies and the military into one story. But the escalating scandal surrounding the former head of the CIA David Petraeus over his extramarital affair with his biographer Paula Broadwell and the involvement of a growing number of other people, has provided just such an opportunity.
The saga has generated the full range of commentary. The serious questions are being asked: Why is the FBI so deeply involved in what essentially appears to be an email harassment case? Why did it take so long for lawmakers to be told? What does this say about military personalities? What are the implications for US national security? Read more
It has been a fun ride for journalists covering Mitt Romney’s US presidential campaign. They have been treated to a smorgasbord of gaffes from the Republican nominee – about-turns on policy, questionable facts to base his arguments on, ill-received comments such as his response to the killing of the US ambassador to Libya last week or his scepticism over London’s readiness to host the Olympics. Read more
Gideon became chief foreign affairs columnist for the Financial Times in July 2006. He joined the FT after a 15-year career at The Economist, which included spells as a foreign correspondent in Brussels, Washington and Bangkok. He also edited The Economist’s business and Asia sections.
His particular interests include American foreign policy, the European Union and globalisation