Wall Street Journal (October 12)
Japan’s dilemma over whether to proceed with the sales tax increase to 10% “mirrors the dynamics in Europe, where France and Italy recently delayed deficit-reduction plans, fearing that spending cuts could tip their fragile economies back into recession.” With much of the developed world facing aging demographics and similar quandaries, all eyes are on Japan. “In a world haunted by stubbornly slow growth and low inflation, Japan’s clinical trial—whether it ends up cure or toxin—will inform other countries when they reach Japan’s state.”
Tags: Deficit reduction, Demographics, Dilemma, Economies, Europe, France, Growth, Inflation, Italy, Japan, Recession, Sales tax, Spending cuts
Financial Times (April 27)
The Spanish people were willing to suffer austerity when Prime Minister Mariano Rajoy “sent the people of Spain a message of hope for the future.” Now the hope is gone and “Mr Rajoy finds himself in an impossible situation. For all the talk of European solidarity, the EU has insisted that his deficit-reduction plan should proceed at an excessive pace. This was bound to trigger a popular backlash.” A similar backlash is rising up in Italy and the Netherlands. “Citizens may have been favourable to their initial message of austerity for a higher cause, but they will not tolerate being led into a dead-end.”
Tags: Austerity, Deficit reduction, EU, Italy, Netherlands, Rajoy, Spain
