Europe's financial diet: EU signs crucial fiscal treaty

Europe has been wracked by strikes and mass anti-austerity demonstrations ahead of Thursday’s EU summit in Brussels. Thousands took to the streets in Spain, Greece, Belgium and France to protest against harsh budget cuts.

Eurozone crisis
Health workers shout slogans during a demonstration against the government's austerity measures in central Athens on February 23, 2012
‘Greece in death spiral’

Greece is caught in a death spiral and now the Greeks are not only cutting their fat, but also their flesh, and possibly even their own arteries without any chance to get out of the crisis, believes investment advisor Patrick Young.

The Greek parliament has approved a bill on an unprecedented debt write-down with private investors, a vital part of the EU’s bailout plan, which is set to save Athens over €100 billion.

Hot on the heels of the ECB’s half-trillion-euro handout to 800 banks, 25 EU member states have signed a fiscal treaty committing them to balance their budgets. The move has stoked public anger, with anti-austerity rallies breaking out across Europe.

The controversial fiscal treaty has been signed at a European Union summit taking place on March 1-2 in Brussels. The agreement introduces new budgetary regulations to which signatories must strictly adhere. The document also carries automatic sanctions for any country failing to comply with the rules.

The two countries abstaining from signing the treaty were the Czech Republic and the UK. Ireland has signed the document, but will hold a referendum on whether to ratify it. However if the country stays outside the treaty, it will lose access to EU funds and will not receive a second bailout should it need one.

Meanwhile, thousands of workers across Europe are protesting at cuts in pensions and wages, demanding that measures to promote growth be taken instead. Mass protests have taken place in Spain, France, the Czech Republic, Belgium and Greece.

The latter has probably suffered the most from the severe austerity measures. This week, the Greek government introduced a 22 per cent cut in the minimum wage, further slashed benefits and pensions, and cut state expenditure on healthcare and medicines in order to secure EU financial help.

For their part, EU leaders are optimistic about new policies. European Commission President Jose Manuel Barroso said on Wednesday that the measures taken to date, including a deal to cut Greece’s private sector debt by about 100 billion euros, will pave the way out of Europe’s debt crisis.

"I think we may have the conditions now to start changing perspectives," said Jose Manuel Barroso. "We now need to invest as much in getting Europe back into growth as we are currently investing in getting Europe out of the crisis."

The EC chief added that Greece’s prospects also look promising, despite the imposition of massive budget cuts.

"Without being complacent, I think we can begin to be confident that we are laying the conditions to increase the growth potential for Greece, if we stay the course," he said. "Regarding Europe in general, while our forecasts are for a mild recession this year, the interim economic forecast also points to the return to growth in the second half of the year."

­Marta Andreasen, an MEP from the UK Independence Party, thinks EU leaders are responsible for Greece's current situation.

“It is the European commission to blame, because they did not control how they [Greece] were using their money,” she told RT.

As for now, Andreasen is certain that further austerity measures are not the answer for the country.

“The only way out for them is to grow their tourism, for which they will need to devalue their currency,” she asserts.

Leaders sign EU fiscal treaty
http://www.euronews.net/2012/03/02/leaders-sign-eu-fiscal-treaty/


BRUSSELS - The leaders of 25 European states have signed a new treaty designed to prevent the 17 euro countries from running up huge debts in order to prevent a repeat of the current crisis afflicting the single currency zone

http://www.washingtonpost.com/business/markets/european-states-sign-new-fiscal-treaty-kicking-off-potentially-difficult-ratification-process/2012/03/02/gIQAHACAmR_story.html

EU leaders seek austerity growth balance

http://www.euronews.net/2012/03/01/eu-leaders-seek-austerity-growth-balance/

Cameron finds EU partners underwhelmed over growth drive
http://www.google.com/hostednews/afp/article/ALeqM5hGG0Yax3z8UI3zFWyHGYM8f5s_sg?docId=CNG.162ccb45a79ece1e4dcf5692b224eb76.921

European Fiscal Compact
http://en.wikipedia.org/wiki/European_Fiscal_Compact

Le nouveau traité européen de discipline budgétaire adopté

Vingt-cinq pays de l'Union européenne s'engagent via ce pacte à limiter leur déficit public à 3% du PIB. L'Irlande en revanche prévoit un référendum sur le sujet.
http://www.liberation.fr/economie/01012393446-le-nouveau-traite-europeen-de-discipline-budgetaire-adopte

25 EU-Staaten unterzeichnen Sparpakt
Der Fiskalpakt für Haushaltsdisziplin verpflichtet die EU-Länder, nationale Schuldenbremsen einzuführen. Die Briten und Tschechen machen nicht mit.
http://diepresse.com/home/wirtschaft/eurokrise/736749/25-EUStaaten-unterzeichnen-Sparpakt?_vl_backlink=/home/index.do


EU signs a 25-member 'fiscal compact'
http://www.agi.it/english-version/business/elenco-notizie/201203021001-eco-ren1180-eu_signs_a_25_member_fiscal_compact

EU summit: All but two leaders sign fiscal treaty
http://www.bbc.co.uk/news/world-europe-17230760


EU members to sign fiscal pact
http://www.chinadaily.com.cn/world/2012-03/02/content_14735812.htm