Germany Isn't Listening to Mario Draghi
Some people are taking heart from an apparent fiscal softening by Berlin and the Netherlands. But the details don’t bear out the optimists.
Show me the money.
Photographer: DANIEL ROLAND/AFPThe European Central Bank’s decision last week to reactivate quantitative easing has put monetary policy back in the spotlight. But as the bank’s president Mario Draghi says, the currency union would be in much better shape if countries with strong fiscal positions opened their purses.
Fiscal doves will no doubt take heart from a slight softening of tone in Germany, the promise of some tax cuts and more investment in the Netherlands and the start of a debate in the European Union on how to improve its fiscal rules. But these changes are still too small to matter. If past experience is any guide, it may take a full-blown recession before the continent’s political leaders act.