After the EU election, Spain and Portugal are moving for a stimulus or a tax cut, exhausted by the fiscal austerity and the low inflation imposed by the EU. Reuters reported.
Spain is the fastest to move, expected to approve a stimulus plan of 6.3 billion euros and a corporate tax cut from 30% to 25%. The investors who shifted their money to Southern Europe might be rewarded. Including the results of the election, we summarise the political affairs of the European countries after the election.
- approving a €6.3 billion stimulus plan next week.
- the corporate tax to be cut from 30% to 25%
- “raise households’ income, boost consumption, enhance the economy’s competitiveness, increase savings and contribute to employment”, said Rajoy, the Prime Minister
- The Supreme Court denied the austerity measures in the budget plan 2014, including salary cut in the public sector, making the gap of 700 million euros.
- The Prime Minister’s Democratic Party won the election
- “The deflation would be a disaster in the euro zone. The authorities should move to prevent it”, said the financial minister Padoan
- the anti-EU, anti-immigration party “Front National” won the election
- “a vote of mistrust towards Europe.” and “the EU should move to improve the growth and the employment”, said the President Hollande
- “cannot assure the UK remains in the EU if Juncker becomes the top of the European Comission”, said the Prime Minister Cameron
These indicate that the citizens are fed up with the fiscal austerity, and there are possibilities of the EU falling apart or the countries leaving the EU. It depends on the Germany’s decision if the result of the election can boost the economy and won’t the EU fall apart. It’s also hard for Germany to withstand compensating for other countries’ financial errors.
- the anti-euro party “Alternative for Germany” gained in the election, but the Prime Minister Merkel’s Christian Democratic Union won the election.
- “the EU should focus on creating jobs”, said Merkel
The anti-euro party “Alternative for Germany” is nevertheless not an anti-EU party, and the nations still support Merkel. Germans, standing the situation where their tax is used for other countries, seem to be the most realistic in Europe. Southern European countries will go against the fiscal austerity furthermore. The investors must keenly watch Germany’s decision.