As was agreed in a meeting of eu heads of states some months back the european investment bank is engaging in stimulus measures
Europe is responding
EIB to provide
Under this idea; countries must still balance budgets and move to coordinated fiscal policies across Europe. Improved regulation will still seek to reduce the risk of a future crises caused by a repeat of the factors leading to the current crisis. So public sector cuts are not going away, however this is a constructive measure to the problems caused by the crisis and the subsequent public spending cuts
The EIB will provide credit on favourable terms to small companies with potential to create jobs. This will enable these companies to expand and provide growth which will reduce unemployment, lower social welfare costs and increase tax revenue. And of course growing small companies contribute to overall GDP growth which will reduce the burden for a country to meet the GDP / debt ratios required under maastricht and reinforced in recent EU agreements.
This approach makes sense as govts cant waste money through politically expedient but unsustainable public deficits. The public sector is good at some things and has it's place but I'd rather trust the private sector to put stimulus to good use than politicians.
What do we think about this coordinated european reaction to address unemployment and soften the impact of balancing budgets ? Surely a good step in the right direction