A welcome shift towards growth in Europe

Mr. Hollande’s won the French Presidential elections by focusing on growth rather than austerity as a method to move away from the massive debt and stagnation in the French Economy. He meets Germany’s President Markel this month to take the dialogue further. The U.S. administration has welcomed the shift in focus towards growth.

The powerful German Economy has been weary of being required to pay for the debt racked up by its less fiscally responsible neighbors, with Mrs. Markel stating quite firmly that the economies that are suffering need to take tough steps to get back on the path towards growth and productivity.

The struggling economies of southern Europe, Greece, Italy, Spain, France, Portugal and Ireland that are at the heart of a huge Euro Zone debt crisis have taken many measures controlling public spending, in effect tightening the belt to ease their debt burdens. With decreasing productivity and a worldwide recession underway this has meant that the productivity of the work force in these countries has stagnated. People are unhappy, and are voting for a change in leadership. Socialist Mr. Hollande won France while the Greeks go back to the polls as their recent elections resulted in a parliament that was deadlocked over the conditions for the 130 billion euro bailout.

Speaking at separate occasions, Mrs.Clinton and Mr.Geithner have said that they welcome the move towards a discussion on ways to grow these struggling economies. Mr. Geithner felt that as a result of the fiscal control imposed over the past few quarters the Euro Zone was now in a position to make some investments towards growth. It is felt that if the austerity measures are taken too far and last too long they will hamper growth and result in a double whammy, high debt as well as low productivity and earning power.

Mr.Geithner stressed that the U.S administration also needs to take tough fiscal decisions to ensure that it gains control over its humungous budget deficits.

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