by Calculated Risk on 5/05/2013 03:57:00 PM

From Bloomberg: France Declares Austerity Over as Germany Offers Wiggle Room

“We’re witnessing the end of the dogma of austerity” as the only tool to fight the euro debt crisis, [French Finance Minister Pierre] Moscovici said today on Europe 1 radio. “We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth.” ...

With German Chancellor Angela Merkel campaigning for a third term in a Sept. 22 vote, policy making among Europe’s elected leaders has ground to a crawl ...

There probably will not be any major changes in Europe until after Merkel's reelection.

More from Reuters: French finance minister says Europe's deficit move marks end of "austerity dogma"

The European Commission on Friday gave France two more years to meet its budget deficit target because of the country's poor economic outlook within the recession-hit euro zone.

"This is decisive, it's a turn in the history of the European project since the start of the euro," Moscovici told French radio Europe 1 in an interview. "We have witnessed the ending of a certain form of financial austerity and the end of the austerity dogma."

I doubt that the era of austerity is over - some policymakers in Europe and the US have invested their entire reputations on austerity - but maybe Europe will slow down the adjustment period.