- - Wednesday, December 28, 2011

BERLIN Debt-weary European leaders faced voters this month and warned of more hard times ahead, a forecast that made some politicians cry as others tried to comfort their citizens.

“You are not responsible for the crisis,” Irish Prime Minister Enda Kenny told them.

In Italy, Welfare Minister Elsa Fornero broke down in tears at a news conference, leaving new Prime Minister Mario Monti to explain that retirees would see a drop in living standards.

These are dark days for Europe, and the watchword is “austerity.”

However, for European leaders who promised voters cradle-to-grave benefits, cutting welfare programs or raising the retirement age is like canceling Christmas.

“It’s necessary. There is no alternative,” said economist Carsten Brzeski of the ING financial group in Brussels. “But of course, politically it’s a very unattractive policy choice. It clearly means that you have to push it through, [but] you will not be liked by the public and probably eventually your government will fall.”

In brighter economic times - when even the onset of the 2008 global financial crisis looked like an ordinary boom-and-bust cycle - German Chancellor Angela Merkel invoked the cozy stereotype of the penny-pinching German housewife as a model for fiscal policy.

However, debt is spiraling out of control in one country after another. The euro - the common currency used by 17 of the 27 nations of the European Union - still faces a possible collapse that could ignite a global economic recession, and austerity measures were forced on a reluctant and, at times, riotous European public.

In Portugal, the ruling Socialist Party failed to win parliamentary support for austerity measures to avoid a bailout and had to seek a $104 billion loan from the EU and the International Monetary Fund. In October, a general strike was called to protest a 2012 budget that will bring tax hikes and fewer paid holidays.

Irish citizens have become increasingly angry about a series of cuts to welfare programs and repeated increases in income taxes to balance the government budget. In November 2010, Ireland was forced to accept a $114 billion bailout. The ruling Fianna Fail government crumbled the following January.

However, little has changed. On Dec. 4 Mr. Kenny, leader of the Fine Gael party, announced a new $5.1 billion austerity package that includes yet more increases in income taxes and more cuts in public spending.

“In my view, the budget is a continuation of the previous three years of failed policies,” said Constantin Gurdiev, economist at Trinity College Dublin. “The only remarkable thing is the swiftness with which the government has taken to the smash-and-grab policies of its predecessor.”

In Spain, the government cut public jobs and salaries, increased the retirement age and raised taxes on the wealthy. However the jobless rate remains at 21 percent, with youth unemployment at a staggering 46 percent. The increasingly desperate Spanish people voted last month to toss out a government blamed for the hardship but ushered in one that is adopting more of the same policies.

“We must be more German than the Germans in terms of austerity, discipline and correcting economic imbalances,” said Jose Manuel Garcia-Margallo, a member of the European Parliament for the newly elected People’s Party.

The call for stimulus spending

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