Public spending curbs and rules against state subsidies will be thrown - temporarily - out of the window to rescue European banks from the abyss of the global financial crisis, EU leaders agreed at the weekend. Leaders of the four largest European Union economies - Britain, France, Germany and Italy - came up with no EU-wide magic formula, or rescue package, to defend the buckling European financial system. They did agree, however, that national governments should be at liberty to take drastic action to shore up their own financial institutions, busting EU limits on national budgets and flouting European rules against public subsidies if necessary. Meeting in Paris, the Big Four insisted that national governments must "consult" their European partners before taking action which could harm rival banks in other countries. This was a rebuke to Ireland's decision last week to guarantee all bank savings for two years but also, implicitly, a recognition that other nations may have to take similar action.But they accepted that the rules of the Stability and Growth Pact - the eurozone rules requiring that national budget deficits should be progressively reduced to zero - should be relaxed. This was a silver lining in the crisis for the French government. Even before the financial meltdown, Paris had been struggling to meet its commitment to balance its budget by 2012.
Public spending curbs and rules against state subsidies will be thrown - temporarily - out of the window to rescue European banks from the abyss of the global financial crisis, EU leaders agreed at the weekend. Leaders of the four largest European Union economies - Britain, France, Germany and Italy - came up with no EU-wide magic formula, or rescue package, to defend the buckling European financial system.
They did agree, however, that national governments should be at liberty to take drastic action to shore up their own financial institutions, busting EU limits on national budgets and flouting European rules against public subsidies if necessary. Meeting in Paris, the Big Four insisted that national governments must "consult" their European partners before taking action which could harm rival banks in other countries. This was a rebuke to Ireland's decision last week to guarantee all bank savings for two years but also, implicitly, a recognition that other nations may have to take similar action.
But they accepted that the rules of the Stability and Growth Pact - the eurozone rules requiring that national budget deficits should be progressively reduced to zero - should be relaxed. This was a silver lining in the crisis for the French government. Even before the financial meltdown, Paris had been struggling to meet its commitment to balance its budget by 2012.
That's a misleading statement.
"Paris had not been trying in the least to meet its commitment to balance its budget by 2012"
There, I fixed it. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
But that's too complicated to explain and goes against flahy headlines, right? In the long run, we're all dead. John Maynard Keynes
