http://www.guardian.co.uk/business/2013/feb/08/eu-leaders-budget-david-cameron
The article above shows the timeline on discussions between EU member countries about the budgeted spending for the next 7 years. As can be seen above, complications arise because each leader is responsible for selecting the best plan for his country (the plan that best leads to economic growth and development of his country) and the member countries of the EU are in different situations. England wants to see much higher spending cuts as does Germany but other countries want to see increased spending to stimulate activity in their ailing economies.
The advantages of the common currency (Euro) may be many but in times like this, member nations must surely miss the financial sovereignty of days gone by when budget agreements were not this difficult and drawn out.
Do you think that there is a more effective way of conducting budget policies within the realm of the EU? That is, can policies be implemented differently on a regional, country-to-country basis?
ReplyDeleteSurely, special exceptions have to be made. Europe's economy is not a single entity, so it cannot exactly be treated as such. I think it would be interesting to see the EU attempt policy enforcement on a smaller scale than the continental one it's currently operating under.
It is a well known Keynesian Theory that cuts or slowdowns in government spending can throw an economy into recession by lowering total demand for goods and services. Additionally The EU is a conglomerate of countries, not just one economy. Do you think that the EU will be able to coordinate these budget cuts effectively?
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