The latest skirmish on the budget, as Berlin (and Brussels) try to hold the line on the stability rules, while Paris and Rome push for greater flexibility, is very much a draw. Hollande and Renzi wanted and needed a very public fight to show their citizens that they have been pressing for less austerity to ensure economic growth, even as they reaffirmed their respect for the rules. They won by gaining modest concessions that marginally violate the rules on austerity. Merkel also won by ensuring that they too had to make modest concessions toward greater austerity. This leaves the question: is this the beginning of the end for the stability rules or is it just the end of the beginning—with wrangling about the rules the new modus operandi? If the latter, Eurozone economies will continue to sink.
Quote appears in the Greek newspaper newspaper Kathimerini on November 6, 2014.