Stefan Kaiser - Austerity Backlash Unites European Leaders

Be it austerity queen Angela Merkel or Socialist François Hollande, European politicians are suddenly in agreement with ECB President Mario Draghi's proposal to round out the European fiscal pact's austerity measures with a "growth pact." But many seem to have a different idea about what this means.  

It's so nice to see Europe in agreement once again. Whether it's German Chancellor Angela Merkel, European Commission President José Manuel Barroso or French presidential candidates François Hollande and Nicolas Sarkozy -- everyone seems to think a "growth pact" for the continent is a good idea. But it is precisely this agreement that should make one skeptical -- because all the vague phrase really does is verbally lump together Europe's tremendous conflicts of interest.

The suggestion came from European Central Bank (ECB) President Mario Draghi. "We have had a fiscal compact," Draghi told the economic and monetary affairs committee of the European Parliament on Wednesday, referring to the treaty European governments signed in March, pledging to toughen their spending rules. "What is most present in my mind now is to have a growth compact."

Since then, the concept has garnered acceptance from all sides. "Growth is the key, growth is the answer," European Commission President Barroso said in a speech. In France, where the presidential campaign continues, both conservative incumbent Sarkozy and his Socialist challenger Hollande saw affirmation of their own positions on the issue. Hollande said it went in the same direction as his earlier policy suggestions, while Sarkozy said that a policy based on austerity alone would be a mistake.

Devil in the Details

But the unanimous approval of Draghi's suggestion conceals just how far apart its proponents are on details. What ECB President Draghi has in mind has little to do with Socialist Hollande's notions. "He doesn't necessarily have the same measures in mind as me to foster growth," Hollande admitted in a radio interview on Thursday. But this disagreement has somehow been overlooked.

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http://www.spiegel.de/international/europe/0,1518,830185,00.html