Merkel Jumps on Pro-Growth Bandwagon

EU loosens shackles on national budgets as euro-area recession deepens.

European leaders are loosening the shackles on national budgets as the euro-area recession deepens and unemployment climbs, with pro-growth calls coming even from German Chancellor Angela Merkel, the leader most closely associated with austerity.

Merkel went into a European Union summit today urging a stepped-up fight against youth unemployment, now over 50 percent in Greece and Spain, and skipped the appeal to fiscal discipline that has been her standard message throughout the debt crisis.

Economic Contraction

The 17-nation currency region will follow last year’s 0.6 percent contraction by shrinking 0.3 percent in 2013, the first back-to-back decline since the euro’s debut in 1999, the European Commission forecasts. It sees bloc-wide unemployment at 12.2 percent in 2013, with joblessness as high as 27 percent in Greece and 26.9 percent in Spain.

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