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Eurozone crisis

Trying to find the right policy for the crisis

Recession, unemployment, the rise of extremist parties - the ongoing crisis is a big strain on Europe. Thursday's EU summit is a search for solutions, but the huge differences will be hard to bridge.

Many leading politicians in Europe are growing desperate. The EU has been running a tough budget consolidation policy for years, but things do not seem to be getting any better. Growth is still weak; many countries are still in recession, and unemployment is rising to threatening levels, especially in southern Europe. More and more countries need help.

Guy Verhofstadt, head of the liberal group in the European parliament, describes the miserable situation: "What I see is the growth of the extreme right in Greece; in Italy we have no government; in Cyprus we have banks that have collapsed; in Spain we have a lost generation; France, Belgium and the Netherlands need new rescue packages, if they are to keep to the rules; in Ireland, they are currently going through the sixth year of austerity."

Many people are asking how long will the people continue to play along - both in the stable countries, like Germany, which are providing the aid, and in the problem countries, which have to make ever deeper cuts. And will Europe fall apart under its own contradictions? That is the difficult backdrop against which European leaders will meet in Brussels this Thursday and Friday (14-15.03.2013).

Ireland as example

European Commission President Jose Manuel Barroso attends a debate, on March 13, 2013, at the European Parliament in Strasbourg, northeastern France. European Parliament votes today on a resolution on 2014-20 EU budget which includes a first-ever overall cut opposed by the head of the assembly and most MEPs. AFP PHOTO/FREDERICK FLORIN (Photo credit should read FREDERICK FLORIN/AFP/Getty Images)

Costs for the weakest impossible to bear, says Barroso

The president of the European Commission, José Manuel Barroso, told the European parliament on Wednesday that the "costs that the weakest in our society have to carry are becoming impossible for them to bear." That meant that a just division of the burden must be a core element of policy, even if there was no alternative to consolidation: "We must not repeat the mistakes of the past by piling up new debts and putting off structural reforms leading to more competition." In fact, claimed Barroso, the EU has long been in the process of correcting those mistakes, with major steps having been taken to reduce deficits and increase competitiveness.

In a letter to the government leaders ahead of the summit, Barroso said the efforts at reform were bearing fruit. He pointed to Ireland, one of the countries which had received a rescue package, as a good example, and Ireland, which holds the EU's rotating presidency, takes every opportunity to present itself as a good example. Its Minister for European Affairs, Lucinda Creighton, says that she, as an Irishwoman, knows only too well what budget consolidation means: "But if we want sustainable growth and jobs, then we have to get our finances in order."

Parliament flexes its muscles

Members of the European Parliament raise their hands in a vote during the plenary session in the European Parliament in Strasbourg, France, 13 March 2013. The European Parliament rejected the compromise of EU governments for the financial planning of the European Union until 2020. EPA/PATRICK SEEGER

The EU parliament is opposed to the current budget

Some people are sick of this message: the British Labour member of the European Parliament, Stephen Hughes, describes it as a "senseless destructive policy." All the promises of an economic upturn had proved groundless. The head of the Green group in parliament, Daniel Cohn-Bendit, complains that the EU will lack the means to intervene when states can't cope if it adopts its long-term budget with the cuts proposed by the member states.

The parliament rejected that budget on Wednesday, showing its teeth on the first occasion that it had to stop the budget. It will now have to negotiate with the European Council.

No need for new ideas - just carry on

Europe is currently divided along several lines: between supporters of consolidation and supporters of a policy of state growth initiatives; between a North which is relatively stable and a weak South; and increasingly, between integrationists, who want more Europe as a result of the crisis, and those who support the national state.

epa03573128 German Federal Chancellor Angela Merkel leaves for a two hours break during the European Council meeting, at the European Council headquarters in Brussels, Belgium, 08 February 2013. EU heads of States gathered for a two-day summit starting on 7 February with the main purpose to agree on the next Multiannual Financial Framework (MFF). After a long night of negotiations the Eu leaders make a two hours break before coming back to discussions. EPA/THIERRY ROGE (recrop of jw03)

Chancellor Merkel is a supporter of austerity

That last group is getting bigger. One of its members is Nigel Farage, head of the UK Independence Party. He's a member of the European Parliament, but he wants Britain out of the EU, and he sees the recent elections in Italy as the latest example of a pan-European trend toward euroskeptic parties. The euro, he says, is the reason for the economic crisis in the south: "The currency union is nothing but a disaster!"

On the other end of the scale is the German Christian Democrat Herbert Reul - all those hysterical outbursts from left and right are getting on his nerves, together with all those new proposals. He argues in favor of quietly getting on with one's work: "You don't win the prize by having a new idea every day, but by plodding along and showing at the end that your work has been useful."

That's roughly the same message that German Chancellor Angela Merkel keeps repeating. But the pressure on the governments to deliver results is growing. Trade unions have called a demonstration against austerity to coincide with the summit. There isn't much time left to find some light at the end of the tunnel.

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