Bloc in Europe Starts to Balk Over Austerity 

France, Italy and the European Central Bank have coalesced into a bloc against Chancellor Angela Merkel of Germany, and they are insisting that Berlin change course.

With Europe once again rattling global markets, many of the largest European countries are now rebelling against the German gospel of belt-tightening and demanding more radical steps to reverse their slumping fortunes.

One after another, European leaders arrived in Milan on Thursday for a summit meeting with their Asian counterparts, smiling for photographs despite gloomy financial news this week of stock markets tumbling and borrowing costs shooting up, especially in Greece, evoking memories of the euro crisis two years ago.

In past years, however, the eurozone nations buckled under to German demands to slash budget deficits and roll back public services, and then watched in dismay as unemployment rates shot into the double digits and growth collapsed.
“We need to show that Europe is capable of investing in growth, and not only in rigor and austerity,” said the Italian prime minister, Matteo Renzi, speaking to reporters outside the conference center after presiding over the opening of the meeting.

The prospect of another European financial crisis can only bring an unwanted sense of discomfort for Washington and the rest of the world, given that China’s economy is slowing, the American recovery remains fragile and the Ukrainian crisis remains unresolved.

“German resistance against the E.C.B. pursuing more aggressive policy is one of the things spooking markets,” said Holger Schmieding, chief economist in London at Berenberg, a German bank.

Source: NYT- Bloc in Europe Starts to Balk Over Austerity

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