Austerity on agenda as G7 meets near London

Stephen Beard May 10, 2013
HTML EMBED:
COPY

Austerity on agenda as G7 meets near London

Stephen Beard May 10, 2013
HTML EMBED:
COPY

Finance ministers and central bankers from the Group of 7 leading economic powers — including the U.S. — are holding informal  talks about the global economy in a stately home north of London today. But their fireside chat may not be too cozy. Germany’s finance chief is in for roasting over the hot topic of austerity.

The U.S. will lead the onslaught, urging the Germans to go for growth and ease up on austerity and slacken their demand that debt–laden euro zone countries cut their public spending. France will join in the Germany bashing and the new, anti-austerity Italian finance minister will add his voice to the small chorus of criticism.

But the Germans insist that the criticism is misplaced. They’ve already shifted ground. With Germany’s blessing, France and Spain have recently been given an extra two years to cut their budgets. German analyst Constanze Stelzenmueller says German policy has been misunderstood.

“In all fairness, Chancellor Merkel would say this is not just about cutting debt or austerity. It’s about structural reforms to labor and services markets in order to enable growth,” says Stelzenmueller. 

Germany does have at least one ally at the meeting in Britain.  Yesterday, Prime Minister David Cameron said, “We need to go on cutting our deficit — but at a sensible, measured pace.”

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.