Newspaper article International Herald Tribune

Austerity Backlash Shakes Europe

Newspaper article International Herald Tribune

Austerity Backlash Shakes Europe

Article excerpt

Romania's government fell Friday in a no-confidence vote just two months after taking office, the latest government in Europe to crumble amid disputes over unpopular austerity measures.

Romania's government fell Friday in a no-confidence vote just two months after taking office, the latest government in Europe to crumble amid disputes over unpopular austerity measures.

Some 235 lawmakers voted against the center-right government of Prime Minister Mihai Razvan Ungureanu, four more votes than needed, plunging the country into crisis and raising the prospect of months of political and economic uncertainty.

The International Monetary Fund, which had been reviewing a precautionary loan for Romania of EUR 5 billion, or $6.6 billion, said Friday that it would halt the review pending the formation of a new government, Reuters reported. President Traian Basescu is expected to nominate a new prime minister, who will be required to present his program to Parliament for approval. But analysts say the process could drag on for months.

Governments have been collapsing across Europe amid calls by Germany and others for tough austerity measures to help restore confidence in the euro zone, even as some critics complain that aggressive cuts are undermining economic growth and spurring European citizens to protest. The sovereign debt crisis, accompanied by visceral frustration with the extent of painful government spending cuts, has helped unseat leaders in countries including Greece, Ireland, Italy, Portugal and Spain.

Chancellor Angel Merkel of Germany showed little sign of backing down from her austerity mantra. "The fiscal package has been agreed to, it has been signed by 25 leaders and has already been ratified by Greece and Portugal," she said in an interview with the WAZ media group published Friday. "It is not up for negotiation. In addition, the growth that some are now calling for has been a second pillar of our policy alongside solid finances."

In the Czech Republic, the center-right government survived a vote of confidence in Parliament on Friday by 12 votes, staving off early elections for now and helping to clear the way for unpopular new spending cuts of the sort that unhinged the Romanian government.

Tomas Sedlacek, a member of the Czech National Economic Council, which advises the government, argued that austerity remained the only viable solution to unbalanced budgets. "The question is no longer whether it is necessary to introduce austerity, but how to do it," he said. "Debt can no longer drive an economy."

But he acknowledged a popular backlash around Europe:

- Spain reported that unemployment increased to 24.4 percent in the first quarter and more than half of Spaniards under 25 were now without jobs. The figures were the latest setback for the conservative government of Prime Minister Mariano Rajoy. …

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