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Groucho Marx once said that money frees you from doing things you dislike. “Since I dislike doing nearly everything, money is handy,” said the Marx Brother.
Having spent billions of euros they didn’t have, governments across Europe are now finding out the hard way that without money they have to accept things that they would rather not be doing—namely, taking orders from Angela Merkel in Berlin and Mario Draghi in Frankfurt.
Late on Thursday, in Dublin, a scandal rocked Enda Kenny’s government when reporters got hold of the Irish budget three weeks before it was due to be unveiled to the Irish people.
According to a document seen by Reuters, Irish VAT is expected to rise by 2 percent and despite denials from Dublin, it appears very likely that Kenny’s visit to Berlin this week saw him ask Angela Merkel for approval of his spending plans for 2012.
“The reports are undoubtedly true,” said one Irish business leader who spoke to CNBC following the reports. “A rise in VAT does nothing to boost growth, without growth you do not get lower debt.”
The problem for those pushing a growth agenda is that Angela Merkel and the German government do not yet have a growth strategy for Europe—so Europe does not yet have a growth strategy.
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