New Fiscal Compact, Or More Of The Same For Europe?
While the language, so far, of the new fiscal compact for the European Union remains wishy-washy at best and outright useless from an enforceability perspective at worst, we thought it instructive to take a look at just where we stand within the existing 'old' fiscal compact. The Wall Street Journal's interactive charts has an excellent example of the disappointing state of the union and the likelihood that anything new will change anything at all. Presented with little comment -12 of the 17 member nations currently have annual budget deficits that exceed the existing (and new) fiscal compact's 3% of GDP rule (including FrAAAnce).
Given recent macro performance, the French and German demands (which are absolutely identical to the existing demands) may serve to self-admonish push even more into heavier and heavier deficits (as we note today's lost-in-the-storm headlines from Greece that they are dropping their capital gains tax increases - oh well.