Newspaper article The Christian Science Monitor

Europe Gets Down to the Details of Curbing Deficits and Debt

Newspaper article The Christian Science Monitor

Europe Gets Down to the Details of Curbing Deficits and Debt

Article excerpt

Europe looks to be serious about the structural change needed to solve its deficit and debt challenge. Will the US follow suit?

With global financial markets shying away from Europe's weak currency, leaders on the Continent are finally getting serious about their high spending and government debt. Emerging details show just how serious.

Wisely, many countries are going beyond merely cutting or freezing the pay of civil servants. They're also tackling needed structural reforms - using the euro and debt crisis for a government- sector make-over.

In Germany, the Cabinet has just agreed to the most stringent austerity package since World War II. It plans to cut the public workforce by up to 15,000 employees and pare back welfare, including lower payments to new parents and means-testing for jobless benefits.

The Army is being looked at, and may end up with 40,000 fewer soldiers, from a total of 190,000. (This particular cut, while a budget saver, does not help Germany's standing in NATO, which is currently at war in Afghanistan.)

Meanwhile, certain subsidies for business will end, while taxes or fees will be applied to the financial sector, nuclear power, and air travel.

Said a resolute Chancellor Angela Merkel on Monday: "Germany as the largest economy [in Europe] has a duty to set a good example."

In Italy, the government will be turning to regions and local governments to share the burden of federal spending cuts. By necessity, that will force reform down the pipeline.

In Greece, which triggered Europe's fiscal self-examination as it inched toward debt default, the statutory retirement age for women is being raised to 65, to match that of men. Next month, the government will begin counting the number of its public workers - for the first time. It has no idea how many such workers it has, but they'll be getting a serious pay cut.

It will also raise the value-added tax (essentially, a sales tax) by two points to 23 percent, and increase taxes on tobacco, fuel, and alcohol (it's forced to raise revenues this way because of such widespread cheating on income tax - which itself needs reform). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.