Monday, December 05, 2011

Europe: More Austerity, Planning for "fiscal union"

by Calculated Risk on 12/05/2011 08:46:00 AM

From the Financial Times Rolling blog: Eurozone crisis lists today's events in Europe:

• Italy’s technocrat-prime minister, Mario Monti, has unveiled tough austerity measures and economic reforms
• Nicolas Sarkozy ... and Angela Merkel ... will meet in Paris ... the structure and rules of a new “fiscal union” in Europe
• Herman Van Rompuy, the European Council president ... meets with foreign ministers to outline the scope of the talks leading up to Friday
• The Irish government presents its austerity budget ...
From the WSJ: Italy Plan Opens Pivotal Week for Euro
Italian Prime Minister Mario Monti, in his first test since taking office two weeks ago, outlined a three-year plan made up of €30 billion ($40.2 billion) in tax increases, spending cuts, pension overhauls and growth-boosting measures.

The package—equivalent to 1.9% of Italy's €1.6 trillion gross domestic product—will likely be followed by Franco-German proposals on Monday to create a new regime for budget policies in the euro zone, which European leaders could adopt at a summit on Dec. 8-9.
From the NY Times: Italy’s Leader Unveils Radical Austerity Measures
Telling Italians that the fate of their country and the euro was at stake, Prime Minister Mario Monti unveiled a radical and ambitious package of spending cuts and tax increases on Sunday, including deeply unpopular moves like raising the country’s retirement age.
...
The standard retirement age, now 60 for many women and 65 for most men, would quickly rise to 62 and 66, with incentives to keep working until age 70; the standard age for women would eventually rise to match that for men. Pensions would be based on the number of years of contributions, not on the worker’s salary at the time of retirement, as is common now.
Weekend:
Summary for Week ending Dec 2nd
Schedule for Week of Dec 4th