Tag Archives: EU

A Spotlight on Greece’s Energy Potential But Roadblocks Remain

As Athens struggles to find a viable path out of Greece’s current economic morass, the country’s oil and gas potential have come under scrutiny as possible keys to future growth. However, despite early reports detailing potential across the Eastern Mediterranean and Aegean seas, accessing those reserves may prove more difficult than government officials are letting on.

According to NBC News, Prime Minister Antonis Samaras released a study earlier this summer suggesting as much as $600 billion worth of offshore natural gas in waters accessible by Greece. The report pointed to 3.5 Tcm and the equivalent of 1.5 billion barrels of oil off the southern coast of Crete that might equal or surpass reserves found in the Eastern Mediterranean Levantine Basin. The Levantine Basin is currently the focus of a surge in activity and investment from Cyprus and Israel.

In hopes of replicating the Eastern Mediterranean natural gas rush, Athens has begun offering licensing rounds and seismic studies of the region to move forward with a sector that they feel could be a path towards erasing their debt and addressing the heavy costs of current energy imports. Greece currently spends about 5 percent of GDP on foreign oil and gas each year.

Despite such potential, reaching Greece’s reserves could be particularly challenging and unrealistic for short-term economic recovery efforts. Facing significant pressure from Brussels to reign in spending and address massive debt obligations, Athens has pursued a program of austerity that has done little to ensure political stability or investment confidence.

With little funding to spare and possible benefits years off, the idea of dedicating money to early hydrocarbon development appears increasingly impractical in the eyes of the country’s economically stressed population. The country’s licensing rounds offer one path forward, but it is still too early to tell whether foreign investors are willing to enter the still volatile Greek economy. Further, the country’s privatization push includes the sale of domestic natural gas provider DEPA and its transmission system operator, making the bridge between significant future hydrocarbon revenues and the state all the more unclear.

Still, Athens appears willing to move forward with the energy exploration effort and has also begun exploring the possibility of establishing themselves as a transmission hub for gas from the Levantine Basin when Cypriot and Israeli efforts begin to mature.

Image: Hellenext

Originally Posted: Newsbase EurOil Monitor

 

 

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Southern European Energy Looks for Footing in New Economic Environment

As governments across Southern Europe struggle to adjust to a new and limited political reality, many state energy policies are reflecting a more conservative planning approach. While most attention has been paid to how these new policies stand to affect renewable sectors in Spain, Italy and Greece, state strategies to conventional energy resources will also be influenced by fiscal limitations and new political leadership.

At the heart of most energy policy decisions from Madrid to Athens is the effort for new governments to reign in spending and reduce budget deficits to meet goals laid out in conjunction with stakeholders on the European and international market level. This environment has increased uncertainty among foreign investors, a sharp reduction in the amount of government funding available for any new energy endeavors and an almost across the board increase in energy prices for consumers.

In the case of Spain, a precarious energy landscape and daunting 27 billion euro sector budget deficit has been met with a pledge by industry minister José Manuel Soria that the financial burden will be shared across the industry. While that pledge has so far only affected renewable and coal subsidies and an increase of consumer prices of 7 percent for electricity and 5 percent for gas, there is worry that it could soon spread to more traditional efforts. Heavily dependent on foreign resources, Spain has seen new domestic exploration projects in the form of shale efforts in the north and offshore drilling near the Canary Islands.  

Similarly dependent on foreign resources, Italy and its technocrat government led by Mario Monti has pledged a wide-array of cuts to existing traditional and unconventional energy endeavors, though they have so far not seen a spike in consumer prices thanks to a steady decline in demand brought on by economic pressures. Having faced a steady decline in available energy resources as a result of both foreign challenges (Iran, Libya) and those closer to home (offshore bans, the failure of nuclear resurgence), Italy has signaled a focus to shift support towards less traditional energy support as opposed to revisiting conventional options. Last week saw the Monti government introduce the idea of a carbon tax aimed at providing funding for sustained support for green energy options.

In Athens, the government’s aim of debt reduction has spurred a move away from state-backed energy endeavors with a host of privatization efforts planned for this summer. After signaling a willingness to seek investment for a sprawling 20 billion euro solar farm project, the appointed Greek government announced an effort to sell off state holdings in Hellanic Petroleum and the state natural gas firm DEPA. The move comes as many in the region have expressed strong interest in further investment in natural gas discoveries in the Eastern Mediterranean.

In all cases, such privatization efforts come at the very real risk of losing out on significant future revenues in favor of short-term fiscal relief.

David Parker, Emeritus Professor of Privatization and Regulation at the Cranfield School of Management told Reuters, “We are certainly going to have a risk that the government sells off industries without really thinking about the long-term implications.”

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Energy Firms Included in Debt Reduction Efforts

As European Union pressure forces both member governments and banks to distance themselves from debt burdens to help build confidence in their ability to weather the storm of the Union’s financial crisis, some energy actors are finding themselves at the center of the conversation. This confidence has emerged as pivotal to ensuring bailout funds from the IMF and European Union.

For governments, this has meant unloading anything they can to raise available capital and reduce costly endeavors. For Brussels, this has meant pushing to strengthen EU banks’ core Tier 1 ratios, a measure of a bank’s ability to weather financial shocks, to 9 percent by June, according to the Wall Street Journal. The pressure and deadline has sent many banks and governments to their books in search of viable options for cuts.

Ultimately, it is the government actions that will have the most impact on energy actors in the region, as banks have found their greatest burden to come in the form of bad real estate debt. In the last few weeks alone, governments in Portugal and even Greece have laid out new or revised privatization plans that will see energy firms removed from the public sphere. Last week, Portugal’s treasury secretary

Announced that China’s State Grid International Development Ltd. and Oman Oil Co. would purchase a 40 percent stake in power grid and natural gas pipeline operator Redes Energeticas Nacionais (REN) for 592.2 million euros. Oman Oil has agreed to buy additional stakes. The announcement comes after a December purchase of 21 percent interest in EDP-Energias de Portugal SA by China’s Three Gorges Corp.

The REN sale is a part of the cuts required to guarantee a 78 billion bailout request by Portugal and will be followed by the sale of seven percent of the country’s oil firm, Galp. According to Bloomberg, these sales will be followed up with additional privatization efforts later in the year, though no specifics were offered.

In Greece, EU and investor pressure has forced a privatization campaign that will include the country’s natural gas state monopoly and state oil refiner, among many other public utilities. These will need to be removed from the government roster within the first six months of this year, despite being large sources of revenue for the government.

Image: pedrasilva.com

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The Narrative Starts to Take: Greece is Out

Amid all the back and forth about Greece’s path back from fiscal oblivion, a frustrated narrative has begun to emerge in Athens – all of this is for naught because ultimately the EU and leaders in Brussels and Berlin never had any intention of keeping the beleaguered economy in the union. Sounding a bit hurt and a tiny bit paranoid at first, this take on the situation has gained steam as what appeared to be a finish line for promised cuts and assurances that Athens would indeed play ball, regardless of how painful it was or how little actual support they had from their citizens, kept changing. Frustration turned to outright allegations yesterday as the proposal was floated that any aid package would be held in limbo until after the country’s national elections were held. The response first came with charges that the troika was trying to use the package to manipulate the country’s elections to support the success of a new government that would ensure the further austerity they hoped for, but has now devolved into a discussion of whether the whole process is just a thinly veiled attempt to squeeze Greece out of the union completely.

“There are many in the eurozone who don’t want us any more,” Greek Finance Minister Evangelos Venizelos said during a meeting with President Karolos Papoulias, according to The Guardian. “We are constantly being given new terms and conditions.”

The discussion about Greek’s future has never been particularly pleasant, but recently, the atmosphere has grown toxic and days like yesterday hardly help the matter. With Greece facing down €14.5 billion ($19 billion) in debt set to mature within a month, its no wonder pressure has begun running especially high but if a solution is to be found – if all parties really want to find one – tempers need to calm and they need to do so fast.

Image: Economia

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Greece, Trust and the Inevitable

It’s been difficult to keep track of the back and forth on Greece’s chances to secure a bailout package in time for the country’s March deadlines. As soon as solutions are found and touted, someone finds a way to dash all hope with fresh demands or new criteria for acceptance. In the course of a single day, the bailout package can go from assuredly approved to dead in the water and back again. Its debatable which side has been guiltier of delaying or moving the finish line, but ultimately, the consequences are severe for both sides.

Most troubling about this back and forth, is what it means for the little remaining trust that exists between the Greek government, the general population and the country’s many creditors. The people are suspicious of the parliament and technocrat government, the country’s political leaders are wary of anything that resembles intervention from outside and the EU and IMF don’t appear to trust a word coming out of Athens. No one, it seems, thinks the other is acting in their interest. Today hardly helped that process as a few pivotal EU leaders presented a plan that would push any bailout package back to April, following Greece’s national elections. The move, pushing any distribution past the March bond deadlines, appears to critics as a move to either force default or influence the election outcome by hinging approval on a government that would be sure to institute what the Union leaders want most – more cuts.

Leaving aside the argument of whether austerity is really the best approach to getting Athens out of the ditch – that will come in a later post – its difficult to see what the purpose of this proposal actually is. Greece appears close to the edge for so many reasons, with Iran’s oil cuts adding to the list today, why would EU leaders add more stress to the situation if they really wanted it to succeed?

This question goes back months to when Angela Merkel appeared to offer little hope for certain countries to rebound, sewing doubt where one would think she would offer a bit more optimism. Since then, she has been a voice of reason but also one of cautious doom, keeping the process moving but without much confidence that it would lead anywhere or really even be seen through. From the Greek side of things, I can see how the pessimism, added to the actual, real-life pressures they are dealing with, is starting to grow heavy. Are the country’s creditors actually doing something to solve the problems – to find a solution – or just staving off the inevitable? Would an outside plan work, even if complete control was handed over to Germany? Is it preferable just to face the obvious sooner than later or is there really a viable path forward that does not mean giving up any sense of control or autonomy?

Image: The Financial Post

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Something Very Wrong in Athens

Two days before a scheduled vote on a long-delayed vote on the spending plan needed so that Greece can receive enough money to pay its creditors, an enormous wrench has been thrown into the whole process, named George Karatzaferis. While members of all parties voiced strong opposition to the amount in cuts demanded by the troika (the European Union, the IMF and the European Central Bank), none had gone so far as to state that they would not ultimately support the effort. After all, the long delays have brought Greece precariously close to defaulting on billions owed to foreign creditors – at least no one that had really mattered. However, today, after the agreement appeared poised for a painful but ultimately successful passage on Sunday, Laos party leader, Karatzaferis declared to the masses that he would not be voting for the measure. According to a Wall Street Journal report from the 8th, the measure would include the following:

“minimum wages will be slashed by more than a fifth–by 22% for most wage earners, and up to 35% for young people–while wage hikes based on seniority will be frozen until Greece’s now soaring unemployment rate comes down to 10%. The document emerged as Greece’s political party leaders were locked in a meeting with Prime Minister Lucas Papademos late Wednesday to discuss the painful reforms the country must undertake to secure a fresh EUR130 billion aid package from its European partners and the International Monetary Fund. According to the draft of that loan deal, Greece will also continue to slim down its public sector by 150,000 workers through 2015, and pare back supplemental pension benefits paid to retirees. Other measures call for steep cuts in pharmaceutical expenses on the order of 0.4% of gross domestic product.”

While the debt repayment arrangements had few actual fans, it was the austerity measures that really stuck in the throat of Athens’ political class, especially those facing re-election in the near future. Still, it was not really until Karatzaferis’ announcement today that something like a true roadblock took form. It wasn’t that just that Karatzaferis’ declaration meant the package would not pass on Sunday – it still might. But it did appear to give way to a quick avalanche of vocal protest in the parliament, some rather expected firebombs in the streets, a 48-hour general strike and a now lengthy list of cabinet and government resignations. The package may pass, but it will not pass with the support or even presence of a number of members of the government. This is a pill that an increasing number of Greeks will not swallow. So what does this mean in terms of actual effect? For now, it means a cabinet shake-up, no matter how the vote on the package turns out. Reports this evening state that it will come on Monday, after the final vote. For opponents of the package and really any further EU intervention, this means a fresh boost of confidence that striking the package down is possible – a possibility that could actually be framed as a chosen exit from the European Union by Athens. At least that is how some are seeing it, going so far as to suggest that this would be a welcome conclusion to the whole mess by Merkel. The Guardian noted this afternoon,

“If Greece decided to quit the euro of its own volition, she could say she had done all she could to keep the single currency intact but, in the end, the Greeks themselves had decided it was time to go. The caveat is, of course, that a Greek departure would be orderly rather than disruptive.”

While dancing dangerously close to conspiracy theorists who believed that much of the rhetoric coming out of Brussels and Berlin has been a thinly veiled attempt to squeeze Athens out of the EU, the theory certainly seems more and more plausible with each passing day. And if it proves to be true, you can bet politicos in Madrid, Rome and Lisbon are going to be getting a lot more nervous.

Image: The Guardian

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Europe’s Old Guard Pushes Back, Pt. 1: Trial and Treason

Over the last few months, there have been countless stories demonstrating the difficulty much of the Northern Mediterranean faces when it comes to introducing and actually implementing political, economic and cultural change. At the heart of too many of these stories is the region’s aging population, not because they may be more politically conservative and less eager to embrace necessary change – though they very well might. Instead, it seems they are the ones with the largest slices of the populations invested in the past – those with the most to lose should existing systems be scrapped in favor of more efficient but ultimately unfavorable solutions or those whose egos would be most called into question if national governments finally confessed that they were misguided or simply unsustainable. It can be difficult to admit that you got it wrong and in top-heavy countries like Spain, Italy, Greece and even Germany, getting some momentum behind questioning the status quo can be downright impossible. Recently, there have been a few stories coming to light that do well to demonstrate this challenge, as countries’ old guard have begun pushing back against reform efforts, occasionally in transparently desperate ways.

In Athens, amid loud charges that any call for greater oversight or financial transparency is a conspiracy by EU powers to consolidate power in Brussels, this push back has even resulted in charges of treason. Brought into the Greek government to provide a semblance of order after the country’s deficit was found to be double original reports, Andreas Georgiou set about trying to create what he hoped would be a functional, honest and ultimately boring Hellenic Statistical Authority or ELSTAT. Once the head of the International Monetary Fund, Georgiou was offered up as a technocratic solution to investor worries about the validity of Greek economic information, meant to calm nerves by offering the clearest picture of Athens’ fiscal standing and how much help was actually needed.

Once in place, Georgiou found the task to be far more difficult than first thought but after some effort, he was able to present a firm deficit number with 15.8 percent of GDP, up from the 13.4 percent the statistics office had previously offered up. Sure it was higher than what was expected but it provided a firm place to start working. The reaction from the country’s old guard – namely the ones who had previously and erroneously reported the rate to be around 6 percent – was not what he expected, but possibly should have. According to a Planet Money report, the office first demanded that the report should have been subject to a vote by a statistics department board and union, suggesting perhaps that the figure was up for discussion. Following a possible hacking of his computer, Georgiou was informed that he would face treason charges for actions against the state and could face life imprisonment. For providing a figure that called into question the absolute authority of a body already shown to have provided dangerously faulty economic statistics, Georgiou could face a lengthy stint in prison.

For some the charges fit into a larger narrative of EU overreach, with the new figure meant to allow for greater oversight from Brussels and forced, painful austerity measures but the message of the charges was clear – despite being at the helm when the country got into this mess – when these grand mistakes were made – we are not to be questioned.

Not relegated to financial problems, this old-guard push back can be seen in Spain with the on-going trial of Judge Baltazar Garzon. The controversially crusading judge, who has previously gone after Augusto Pinochet, members of Galician drug smugglers and the Basque separatist group ETA, finally pushed too far when he aligned himself with family rights groups intent on pursing investigations into disappearances during the years under Francisco Franco. First joining with the groups in 2008 as a part of a push to excavate mass graves believed to exist from the Franco period, Garzon immediately ran into resistance from members of the government who pointed to mass immunity agreements passed during Spain’s transition to parliamentary democracy in the late 1970s. Not only that, these campaigns would be chasing ghosts as many, if not most of the perpetrators in question were long since dead.

At first persuaded against continuing thanks to political pressure in 2008, Garzon again took up the mantle and opened an investigation into the death of 114,000 people during the Franco period. As an investigating magistrate, Gazon can initiate cases rather than just oversee them. In response, the political pressure has evolved into charges out outright abuse of power, perverting the course of justice and most recently, of accepting bribes while on sabbatical at New York University. The message seems clear – do not question the actions of our recent past – there are to many with investments in keeping the past where it belongs.

I know it may strike some as a stretch to connect these stories but I believe that both demonstrate an unwillingness by the old guard to face up to the questionable actions of some to the detriment of the country. If these events are not addressed, is it fair to expect them to be avoided again in the future? And should that old guard retain the ability to bury those events firmly in the past?

Image: Baltazar Garzon in El Mundo

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Iran Steps Up Pressure on EU Customers After Embargo

With the EU embargo on Iranian oil passed and the prospect of sharp declines in deliveries looming, many fragile, export-heavy Southern European economies are struggling to find alternatives before the planned July 1 deadline. However, an angered Tehran has warned that Iran could force the EU’s hand and shut down exports immediately, making the search for new sources of crude all the more difficult.

Passed on Monday the 23rd, the EU embargo was supported by US officials who had long pushed for a stricter response to Iran’s nuclear program and what they suggest is an effort to weaponize their efforts. The move came after the US ratcheted up pressure on the Iranian government to abandon their nuclear program, introducing their own sanctions aimed at the country’s central bank, which handled oil revenue, according The Hill. After pressuring European allies to introduce similar efforts, the US welcomed the news of the passage of the sanctions in Brussels, though they were ultimately passed with an extension that would allow those countries with a heavy dependence on Iranian crude to secure alternatives.

Further, the extension to July 1st was meant to allow European firms, such as Italy’s Eni, to pursue and collect unpaid debts from Iranian companies or the government. In the case of Italy, newly appointed Prime Minister Mario Monti appealed for a special exclusion of a billion euro contract between Eni and Iran, arguing that the loss in revenue would hinder the country’s efforts to rebound from its current economic crisis. Representatives from the United Kingdom also issued appeals for exceptions, including a BP-led collaborative project with an Iranian firm to produce natural gas in the north Caspian Sea. The project is aimed at reducing dependence on Russian product.

However, just days after the Brussels announcement, the Iranian parliament announced that they would speed through a bill aimed at shutting down exports to EU member states immediately.

“We want to cut oil exports to Europe next week for which we are preparing a double-urgency bill,” said Hossein Ibrahimi, a member of the parliament’s national security committee in the Financial Times.

The legislative move follows Tehran’s warning that any future efforts to limit Iranian oil sales would result in the forced closure of the Strait of Hormuz, halting the passage of one-fifth of the world’s oil in tankers from reaching western markets, according to the AFP.

This new pressure has left some countries, including Spain, Italy and Greece, short on time when it comes to nailing down fuel options should Tehran follow through. So far, options have included increasing imports from Russia, Saudi Arabia and Iraq, though it is yet unclear whether these countries will be able increase production and delivery to meet the shortened deadline without impacting the market with a shortfall.

While representing just 5.8 percent of Europe’s total oil imports in 2010, Iranian crude provided 14.6 percent of Spain’s demand, 14.0 percent of Greece’s and 13.1 percent for Italy, making a sudden shutdown of imports all the more impactful across Southern Europe. Complicating the situation still further, those countries most affected by the embargo are the same EU member states struggling with dire economic outlooks for the New Year. Any additional increases in costs or energy deficits could serve to exacerbate already daunting financial pressures. While Saudi Arabia has suggested that they have ample reserves to address any Iranian reduction, cooperation from Russia may be a little more difficult for EU customers as the country’s leadership has expressed concerns about the actual embargo.

“It is obvious that what is happening here is open pressure and diktat, an attempt to ‘punish’ Iran for its intractable behaviour,” the foreign ministry said in a statement, according to New Europe. “This is a deeply mistaken line, as we have told our European partners more than once. Under such pressure Iran will not agree to any concessions or any changes in its policy.”

Further alternatives for Southern European customers exist with an increase in production in a post-conflict Libya, however significant obstacles still hinder the country’s ability to ensure adequate delivery. According to the country’s National Oil Corporation, production has reached 1.3 million barrels a day after the country’s civil war halted all production early last year. Although they have assured customers and foreign investors that they will soon reach and surpass pre-conflict levels of 1.6 million bpd, concerns about security, stability and infrastructure deficits remain. While Libyan exports could help ease the impact of an Iranian shutdown, it would not likely be enough to address all the needs of Spain, Italy and Greece

Could it Backfire?

While the pending deadline is causing additional stress across Europe, ultimately, analysts have suggested that any move on the part of Tehran to force the stoppage would mean worse news for Iran than any EU states, even those searching for other options. According to a Financial Times report, if enacted, the early ban would force the National Iranian Oil Corp to find new customers for up to 600,000 barrels of oil per day, inviting the possibility of heavy discounts to entice new clients in Asia. Dependent on oil revenue for up to 80 percent of government spending, Iran would likely find it difficult to lose customers for very long.

Image: Iran Review

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EU Offshore Rules Face Tough Road Ahead

A year and a half after the Deepwater Horizon spill in the Gulf of Mexico led to calls for stricter offshore regulations in European waters, proponents continue to push for greater oversight and a more restrictive drilling environment. However, despite proclamations of support and proposals from the EU, advocates face stiff opposition from political and industry leaders across the Mediterranean.

Beginning late last summer, environmental and political groups across the Mediterranean began calling for local bans on offshore drilling efforts and new rules associated with safety and compensation following the Deepwater spill. Driven by fears about how a similar event could impact the Mediterranean, groups successfully lobbied for localized moratoriums on drilling in Italian waters and further reviews of existing projects, including BP’s efforts in Libya. Led by EU Energy Commissioner Gunther Oettinger, proponents of a stricter approach to offshore efforts pushed for a complete revision of EU regulations on the topic and the introduction of new industry observers. The campaign resulted in the passage of a draft resolution by the European Parliament in October that included would increase the area subject to protection 16-fold, from 22km from shore to 370km as well as increasing the amount companies would pay for clean-up efforts. The new offshore rules would impact 90 percent of oil and over 60 percent of gas produced in the EU and Norway, according to Bloomberg, though it did stop short of calling for an outright moratorium.

Although the resolution easily passed the EU parliament, setting it up for the approval of all member state governments and application within a year or two, the resolution faces stern opposition from political and industry figures.

The leadership of France’s Total blasted the introduction of new rules to the region, advocating that UK rules on offshore activities take precedent over any novel approaches from the EU.

“In the UK the standards are the best in the world…. We have to be very careful to take the best but not to introduce bureaucracy into the process,” said Total’s senior vice president for Northern Europe Patrice de Vivies, according to Reuters.

Further afield, the new regulations could run afoul of new and revived drilling campaigns in the eastern and southern Mediterranean, including projects initiated by Cyprus, Israel, Greece and Libya. While ostensibly out of European waters, efforts in Libya would be impacted by overlapping issues, making the introduction of much-needed oil and gas efforts difficult to achieve.

Image: Rff.org

 

 

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Are Germany’s Demands Even Good for the Med?

As Spain’s new government settled in to the reality that 2012 may just be worse than they dared dream it could be – with unemployment hitting 22.8 percent today – Prime Minister Mariano Rajoy appears to have realized that straight cuts and deficit reduction may not be the only path to recovery. Indeed, Rajoy now joins a host of Mediterranean leaders who are withering under the deficit demands of the EU’s strongest and most influential figure, Germany’s Angela Merkel. They want to get things under control, they insist, but all austerity and no efforts to spur growth are leaving them stagnant and facing increasingly frustrated populations. Making matters worse, they are facing a growing chorus of critics who suggest that the very cuts so vital to Merkel’s plans for recovery and assurances of fiscal support are actually making growth harder to achieve. At this week’s World Economic Forum in Davos, both George Soros and IMF Chief Christine Lagard echoed those sentiments with what could be construed as appeals for Merkel to back off and let a more collaborative approach take over, with the IMF head noting, Resorting to across-the-board, across-the continent, budgetary cuts will only add to recessionary pressure.”

For Rajoy and heads of state like Italy’s Mario Monti, the situation has left them appealing to Merkel directly, asking her to ease up on deficit cutting demands to allow for some efforts to spur growth when their countries need it and jobs most.

The Guardian’s Giles Tremlett reported, “While Rajoy, who met German chancellor Angel Merkel in Berlin on Thursday, publicly maintains his target of reducing the deficit to 4.4% from more than 8% last year, his ministers are letting it be known that they want the EU to ease up on deficit targets which require severe adjustments. Rajoy himself has pointed out that the EU’s target for 2011 supposed not only that last year’s deficit would be 6%, but also that growth this year would reach 2.3%.”

However, despite such appeals, Merkel appears unmoved while the debate continues to build around her. Still, its worth asking how long she can hold out until she begins to feel the pinch as sustained unemployment and negative economic growth in the southern states continue to weigh down Germany’s flagship economy.

 

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