A Dutch Austerity Slap for Italy and Portugal, and Perhaps the Other PIGS

Over the weekend, the EU held yet another summit. This time, the summit was called to address a potential roadmap for COVID-relief within the EU-finance bloc. As is typical, the talks begin with the finest of intentions, with the all parties jawboning the importance of close cooperation and stoicism in the face of a financial disaster.

Given time, the typical fractures emerge as the wealthier EU Members such as Germany and Netherlands begin leaning on their more highly indebted neighbours with demands of increased austerity as a condition of financial support. The 27 leaders met in Brussels to flesh out a program of loans and grants, with the ‘Frugals’ (Austria, Netherlands, Denmark and Sweden) demanding lower levels of outright grants.

As is always the case within the EU merry-go-round of financial crisis and rescue, we have no doubt there will be an eventual solution, resulting in yet more quantative easing of some kind, and greater demands for austerity upon those EU Members who are least able to support it. As whispers of Italexit appearing yet again, and the eventual financial damage of COVID not yet quantified, there will be a solid newsflow for Brussels and beyond in coming months and years. One wonders if indeed the can will be kicked in perpetuity, with no eventual ‘end’. Read more…………..