At their meeting on Friday, which was originally scheduled to discuss energy policy, EU leaders were presented with a six-point, Franco-German statement described in the press as a “Pact for Competitiveness”. In exchange for agreeing to a €200 billion increase in the €440 billion European bailout fund, Germany and France are seeking to dictate budget policies across Europe.
Key elements of the pact include a universal increase in the retirement age to 67, the abolition of agreements in a number of countries that protect salaries by linking them to the rate of inflation, and the adoption of constitutionally mandated spending limits....
Another prominent measure advocated by Germany, the so-called “debt brake”, means that national governments will be restricted by their own constitutions from raising extra funds to finance public works projects or finance social spending. This proposal would make it illegal for any political party to react to popular pressure, making even limited concessions on budgetary policy. Following its implementation in Germany, the debt brake has been utilised by the Merkel government to justify its own €80 billion package of spending cuts.
The third proposal made in Brussels, which calls for an end to inflation-based adjustments to salaries, is specifically directed against a number of countries where such agreements have been in place for some time, in particular Spain, Belgium and Luxembourg. This demand has also been high on the list of priorities of the major banks and European business elite.
http://www.wsws.org/articles/2011/feb2011/euro-f05.shtml
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