EC to Scrap Austerity for Growth Following Hollande Victory

Politics » BULGARIA IN EU | May 8, 2012, Tuesday // 11:23
Bulgaria: EC to Scrap Austerity for Growth Following Hollande Victory Photo by EPA/BGNES

A significant change of the European Commission's rhetoric away from an emphasis on austerity as a measure to rein in financial instability is expected after Sunday's win of socialist Francois Hollande at presidential elections in France.

European Commissioner for Financial Affairs Olli Rehn has already issued a statement suggesting that Europe should move away from preoccupation with austerity and concentrate on promoting growth to tackle the crisis.

Now European Commission President Jose Manuel Barroso is also expected to make a statement to that effect, urging for measures to create growth in the EU in the short term.

As a presidential candidate, Francois Hollande has said he would go for a revision of the EU's Fiscal Stability Pact and the creation of an EU Pact for Growth.

According to sources, Barroso will not present anything radically new in terms of measures, as the Commission has of late independently urged for economic stimuli, but the change of tone still remains significant.

Additionally, the EC President is expected to propose using resources of the European Union to achieve a boost of the member states' economies, in view of the fact that single countries are reluctant or incapable of doing so.

The new development is expected to bode troubles for the government of Germany, where Chancellor Angela Merkel and especially Minister of Finance Wolfgang Schaeuble have been staunch defenders of austerity and strong fiscal discipline as remedies to the financial crisis.

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Tags: francois hollande, European Commission, EC, European Union, Jose Manuel Barroso, Olli Rehn, Wolfgang Schaeuble, Angela Merkel, Germany, France, austerity, financial crisis, growth

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