"If the eurozone were serious about a U-turn on austerity, the only effective way to accomplish this would be for the creditor countries to expand their fiscal positions during the recession. The opposite is happening. Germany, a country with a lot more fiscal space than Italy, undertook a fiscal adjustment of almost similar scale. (...) There is no way that Germany in particular will accept a fiscal stimulus for the sake of the southern European countries. This is because Germany restrained itself by passing a balanced budget law that requires the government to run near-zero structural deficits indefinitely. (...) So if you want austerity to end, you need to start by repealing the fiscal pact and amending some of the secondary legislation governing fiscal policy co-ordination. I do not think this is going to happen. My conclusion is that austerity is here to stay, but will simply be presented with warmer words. And it will last for as long as the euro exists."
Wolfgang Munchau, "Italy’s change from austerity is all talk" (Financial Times [online], 5.5.2013).
