On Wednesday 16 November 2016, the commission published a review of the budget programmes put forward by various countries. It called for a fiscal expansion next year of 0.5 per cent of GDP in Europe, saying this was necessary to maintain the recovery. It warned eight EU member states that the 2017 budget may violate its own commitment to the Stability and Growth Pact.
Many commentators see this as an end to austerity measures, and claim it is a response to recent events such as Brexit and the election of Donald Trump.
Or is this merely a sensible response to the additional and unexpected extra costs imposed on EU states due to the migrant crisis? And are the European media ignoring all the facts? For example, the fact that on the same day, Slovenian lawmakers approved a two-year budget aimed at reducing the deficit to the lowest level in nine years following a warning from the European Union’s executive that the country may flout the bloc’s public-finance rules.
And what does this tell us about the power of governments to act responsibly in the face of popular unrest? Will this act help to fuel a further decline in the long-term prospects for prosperity in Europe and the cost of short-term political gain?