Germany’s position on responding to the recession is winning out in the EU. The working papers of the Economic and Finance Committee prepared for the Ecofin meeting are reported in FT Deutschland. It is argued that it is now time to plan an exit strategy and agree on a binding plan to reduce deficits. 'Europe’s finance ministers are determined to decide a fiscal exit strategy as early as Tuesday, in time for the June 19 EU summit.' France wants to wait until September before reining in stimulus measures on the grounds that deficits are due to lower tax receipts not discretionary fiscal measures.
The Saviour of the World has just been foiled in implementing a potentially disastrous programme of discretionary fiscal measures by being too weak to sack the Chancellor of the Exchequer. ('Beefing up' the Department of Business, reported in the FT on the reshuffle, by adding parts of the Department for Innovation, Universities and Skills such as responsibilities for science and possibly skills, is no substitute for holding the Treasury.) Now the Europeans aren't going to do as he wants either. The G20 days of glory were confined to Docklands.
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