Due to its size and importance, Germany has taken all of the criticism for enforcing a hard line on the austerity quid pro quo which allowed the euro zone bailouts to proceed. However, policy makers from a number of other countries share similar concerns about the negative political effects that bailouts for those perceived as fiscally profligacy will have. At varying times, we have heard this in Finland, Slovakia, and Austria to name a few countries within the euro zone. Politicians from Sweden and Latvia have also expressed reservations.
In the Netherlands, it looks as if the government could receive a voter backlash for its support of the bailouts if things continue as they have. David Tweed of Bloomberg reports.
It is this domestic pressure which ties the hands of governments in the EU – and not just in Germany. This pressure also makes an eventual default in the periphery likely.
