“I agree… we have to put growth back at the centre of the agenda,” and with those words the rise of the austerians ended.
Mario Draghi didn’t actually put any ECB backed stimulus proposals on the table. But he did place the onus on eurozone governments to come up with a growth and investment pact that would balance the fetishistic obsession with cutting and hiking.
A year ago a government minister admitted to me privately that the “ECB wouldn’t care if we had to eat our young in order to survive”. So even though it’s all a bit wooly and aspirational Draghi’s carefully chosen words yesterday are another nudge away from this “cut to the bone” guiding philosophy.
Francois Hollande has his removal van booked to bring him to the Elysee Palace on Monday. The Dutch have rejected proposals to throttle what they see as a perfectly sound economy. Even Angela Merkel has admitted the need to balance austerity with growth stimulus.
And so the pendulum is swinging back in the other direction. This is all part of the rhetoric that Michael Noonan hopes will be translated into policy over the course of the year.
So even though we’re a long way away from a Eurozone Investment Compact it’s timely to ask do they work? What do they look like? Would the Obama Stimulus package translate to the Europe? Which, with the help of Prof Stephen Kinsella from UL I had a stab at here.