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Europe Budget Cuts Will Crimp Economy, Tech Spending

In recent months, European governments have moved to combat the region's debt crisis with what often seem like savage budget cuts at national, local, and township levels.

The cuts, especially in the UK, are likely to have implications for all sectors of the economy and particularly for high-tech equipment manufacturers, as governments — which have in recent years boosted spending to spark growth — curb expenditure and hiring.

Almost all 27 EU nations have plans to curb spending and reduce debts to contain a financial crisis that has threatened Europe’s currency union. Deficits measures introduced to deal with the aftermath of the financial crisis include social and military spending cuts as well as tax increases. (See Portugal fears more budget cuts may be required: Minister and Europe budget cutters outpace U.S.)

Some of these cuts will pinch the high-tech sector hard. Defense equipment and component suppliers are likely to feel the impact in cutbacks to future orders. Europe, which has championed efforts to reduce the impact of pollution on the environment, is canceling subsidies, driving up prices, and tamping down on demand. Suppliers of wind and photovoltaic equipment are likely to see reduced demand as a result of subsidy cutbacks in Spain and Greece. (See European Renewables Industry Staggered First by Recession, Now Budget Cuts.)

Jose Maria Barroso, the president of the European Union, summed up the prevailing sentiment when he noted that governments could not abandon current efforts to reduce swelling debt and deficit because there is now “an emergency situation from a financial point of view.” What does this mean for Europe? In its largest economies, Germany, France, and United Kingdom, the belts are being pulled tighter while the smaller countries are implementing severe austerity measures.

In the UK, Chancellor George Osborne plans to pare £81 billion from the budget. This will significantly hurt recruitment and equipment purchase for the police, military, welfare, and healthcare departments. One report said as many as “a million public sector jobs are to disappear, almost all ministries will see drastic budget reductions, and even the Queen will have to become more parsimonious.”

Don't get comfy on the other side of the Atlantic either: The Republican victory in the midterm elections could also bring budget cuts in the United States.

32 comments on “Europe Budget Cuts Will Crimp Economy, Tech Spending

  1. Ariella
    November 4, 2010

    I love the quote, “and even the Queen will have to become more parsimonious.” A few weeks ago I heard that she was planning to skip the holiday party that she usually hosts once every 2 years. That is supposed to save her about $80,000, though her annual income is in the millions. I found the figures in pounds at     http://www.allvoices.com/contributed-news/7025891-queen-cancels-partyT he party costs about 50,000 and her annual budget is £7.9 million, a figure that has remained steady for 20 years.  So there you have it, the queen already put cost-cutting measures into effect, though they may not quite be in the holiday spirit.

  2. Susan Fourtané
    November 5, 2010

    When I read this article, which was published some months ago, I wished for a solution by the end of the year. But it seems like the topic is still going on.

    Ellin Cohen, an economic expert at France's Center for National Scientific Research in France said that countries such as Austria, Germany and the Netherlands “have no reason to enact austerity measures” and should not be pushed. (Full text in link above)

    The Queen's budget is one of the few things that always remains steady.

    -Susan

     



  3. Ariella
    November 5, 2010

    Hi, Susan, it's great to hear from you here.   Joseph Stiglitz's term, “deficit fetishism,” I suppose is intended to catch people's attention.  I understand the argument that “Europe needs solidarity, empathy. Not an austerity that is going to push up unemployment and lead to a depression.”  Now I understand that sometimes organizations, companies, and even governments jump on the bandwagon, so to speak, in justifying cuts due to the down economy — even when the cuts make little difference in the overall budget but do major harm to the people whose jobs and income have been cut.  

    I recall that being the case in universities I worked for many years ago.  In one, they cut writing tutors who were getting a big $8 an hour, as if that would make a dent in the multi-million dollar budget.  In another, the budget was blamed for cutting out classes anticipated by adjuncts..  In those cases, it just allows the powers that be to just get rid of people under the guise of cutting costs. 

     But when there really is a shortage of money, how can the government continue spending what it doesn't have?  The practical question is, where is the funding going to come from?  As tax increases also put a damper on the economy, taxation would not be the answer.  So who will supply the money to keep things going without cuts?

     

  4. Susan Fourtané
    November 5, 2010

    Hi, Ariella! That's a very good question.

    In my opinion, the military budget is the first that should be cut. Why? Because many EU countries could live without it. If there is no money supply the public service expenses should be reduced in some way. Say, one position could be shared by two people. The benefit for both would be more free time to spend doing whatever they want -people always complain about not having enough time for anything after work. The salary would be half, but they are so high in some cases that wouldn't represent a real problem. Raising taxes wouldn't be a good option, at least not in the Scandinavian countries where taxes are already too high. 

    So, where is the money going to come from and who is going to pay the bills?

    -Susan

  5. Jennifer Baljko
    November 5, 2010

    Hi Anna

    I'm also  wondering what will unfold on this side of the Atlantic. You say it well –  many of these austerity measure resemble savage budget cuts. Some cuts, of course, are justified, but others seem to defy logic, like cancelling subsidies for alternative energy sources.

    Speaking of the subsidies: While I think subsidies for this particular part of the economy should be provided for a long time, I was under impression that they always had a time limit and would gradually be reduced, regardless of whether or not there was a recession. I thought  the subsidies were set up initially to offset the high capital investment/ infrastructure costs (like get wind turbines installed or solar panels hooked up) and then would be pared back as those services came online. Do you have any more info on how the subsidies were established and how soon they will come to an end? Sorry – I can't quite remember where I got that idea or where I may seen/heard it.

    Jenn

     

  6. Ariella
    November 5, 2010

    I like the idea of offering a position to be split between two people.  For many that would be ideal because it is difficult to find good part-time jobs, and people have to either take positions for which they are overqualified or continue to work full time even when they would prefer a lighter workload.  But employers are not usually amenable to shifting from their preset definitions of the jobs as full time for one person. So maybe what is really needed during these economic times is a willingness to take a different perspective that would come up with new solutions for the shortfall rather than the usual knee jerk response of cutting costs by cutting jobs and departments altogether.

  7. Jennifer Baljko
    November 5, 2010

    Ariella, Susan

    Good idea – two people sharing a position and working part-time. Some of the immediate benefits I see: lower unemployment; greater scheduling flexibility, which means more flexibility responding to customers, and probably increased employee productivity  (amazing how efficient you can be at the office when you know you have other things to do after work).

    Your post also reminded me about something I read many years ago…. a similar job-sharing program in the San Francisco Bay Area. Can't remember which company or organization  implemented it and can't find the article, but I know it involved two women (moms with young children, perhaps) sharing one job. I remember that despite the initial hesitation, everyone was really happy with the outcome – the boss, human resources, customers/clients, and the women.

    I think you're right – we should jumpstart this idea. Otherwise, Europe may have to wait for China to start building factories here so we could put people back to work.

    Jenn

  8. Ashu001
    November 5, 2010

    Ariella,

    Count me in as fan of your job sharing idea.Makes perfect sense today so people can not get some income coming in(in the case of the unemployed who are now also out of Unemployment Insurance-99 weekers) and since Congress shows absolutely no inclination/sign of extening that further all those unemployed need some money coming in.And if it comes from good quality part-time jobs the more the better.

    Also,I personally know of many extremely qualified people who are over-burdened today(not of their own choice but out of compulsion from the employers point of view).

    If these professionals go to their employer and tell them that please hire someone else on a part-time basis (and reduce my salary and hours) it would be an absolute gamechanger for sure.

    Great ideas for sure!!

    Are you a Management consultant by any chance???

    Regards

    Ashish.

  9. Ashu001
    November 5, 2010

    Jennifer,

    The big problem most alternative energy faces is that it is'nt commercially competitive with existing fossil fuel technologies(crude Oil,Coal and Natural Gas).

    But our Great Ben Bernanke just fixed that problem!!

    BY launching QE2 from November 3rd onwards,he is going to devalue and destroy the value of the US Dollar.As the US dollar gets consistently and constantly debased all resourced denominated in US Dollars(Like Coal,Crude Oil and Natural Gas) get more expensive consequently opening the Door once again for Alternative Energy technologies.Once this happens(I am thinking once Crude Oil crosses USD 110/Barrel) would be a good point,All Alternative Energy companies will automatically become cost-competitive with Conventional Energy resources and so the need for subsidies will disapear and we won't have to worry about Europe cutting subsidies in their budgets as well.

    Its a win-win for Europe and For The alternative Energy Industry.The only people who lose are the ordinary middle-class Americans who drive to work.But then when did Politicians in DC or unaccountable bueracrats at the Federal Reserve ever care about the Middle Class?

    Not a fun place to be in…

    Ashish.

  10. Ariella
    November 5, 2010

    Hi, Ashish,

    Glad to have your support, but we must credit Susan with first offering the idea over here.  My consultant status is really limited to writing and editing, though I do manage my own business, I suppose.  But some people may be offended at being tarred with the brush of management, My husband has some war stories of managers that are beyond even the caricature of Dilbert's pointy-haired one!

  11. bolaji ojo
    November 5, 2010

    Susan, I am sorry to disappoint you but the military budgets have largely escaped these European cuts. This has been a difficult sell by politicians at a time everyone is on high alert about terrorism, security and the possibility of war with so-called “rogue” nations. The UK has pulled plans to cut military spending — postponed they said but I doubt it will fly at all. Imagine the fate of a U.S. politician who advocates cutting the military budget!

  12. Anna Young
    November 5, 2010

    Hi Jenn, The history of subsidies for solar energy in Europe was fairly straightforward, until recently. It goes back to the 1970s, I believe, when Europeans were stunned by OPEC's push for higher crude oil prices. Western European governments since then have encouraged production of solar energy in their countries–even by private citizens who sold the output from panels on their roofs to the utility companies at fairly inflated prices.

    You are right. The subsidies were not supposed to be permanent and were to be phased out as production increased enough to offset high initial installation costs. However, current moves to phase out the subsidies or reduce them sharply are not related to any long-term plans but are more a direct result of the budget crunch in Europe.

    When solar energy subsidies are discussed most people don't know it has two prongs. The first is the subsidy offered homeowners to install solar panels and the associated equipment. The second set of subsidies in many countries is the high rate governments in Europe pay homeowners for the electricity produced by homeowners and large power station companies–This is fed into the grid and the “feed-in'tarrifs” paid by utility companies for this is often at a premium to encourage homeowners and producers.

    Spain and Greece are likely cutting both subsidies. The story is different in Germany, though. The country is slashing solar “feed-in-tarrifs” because the project has become too successful. Germany, which arguably sees limited sunlight in the fall and winter, now employs almost 100,000 people in the industry and is reportedly responsible for at least half of global solar energy production. Too many people embraced the project and the government has found itself paying more than it expected for a project designed to help wean the country off of crude oil.

  13. Ashu001
    November 6, 2010

    Anna,

    Yes you are extremely correct that Spain is cutting Subsidies for Solar Power projects(and cutting quite aggresively).The reason they face such serious budgetary constraints is because wages are sticky/inflexible especially in the Public Sector,while in the private sector employers cannot hire and fire at will(with the typical 30 days notice period you have in America).

    The problem they face in Spain(in the Private sector)is if they fire somebody today,they have to pay a significant portion of their wages for more than six months at a stretch.This discourages Hiring permanent employees and puts everyone on contracts.

    As an entrepreneur I can tell you This is not the best way to get businesses running at  full throttle(thereby increasing employment).

    Businesses should have the flexibility to fire(after a 30 day notice period) in cases where demand falls precipitously and it becomes impossible to sustain overheads like employee wages.

    As for the Govt sector,like everywhere else,its heavily bloated in Spain and could do with some severe wage cuts.Most probably we will see heavy strikes and some violence like in the cases of France and Greece but its unavoidable as long as Spain chooses to stay within the Eurozone(and thereby follow the austerity diktats of Germany).

    Regards

    Ashish.

     

  14. bolaji ojo
    November 6, 2010

    Ashish, Over the next few days, EBN columnists will be devoting a lot of prime spots to the issue of the weak US dollar and the potential impact on the tech sector. Watch out for an article on Monday from Scott Raynovich on the potential for a trade war as the dollar weakens versus other major currencies. I will also be touching on this in a follow up article on how the weaker dollar would directly impact reported earnings at the major US companies. It will, of course, have the opposite effect on many companies based outside the US but which sell largely to North America.

    What this means is that currency fluctuations and the impact on trade among nations will become increasingly contentious. What the US is doing to boost economic growth and employment could hurt trading partners and vice versa. This is where the seeds of nationalism gets strengthened.

  15. Ashu001
    November 6, 2010

    Ariella,

    As an IT consultant who has to report to multiple Bosses/employers every week(for different-different employers); I know how much of a pain the feeling of being over-loaded and being under severe pressure feels like.And this inspite of being disciplined and committed to all my various projects.

    Hint:Its not a fun place to be in.

    Anyways,I digress.At those times I have often wondered,would'nt it be nice if I could personally (or the company for whom I do the project) could outsource a small portion of my work that needed to be completed at that point of time(and they could keep the money too). Something like On-Demand Consulting for Consultants…..[Is it a fairytale dream??? I dunno]

    And your idea here fits in perfectly.

    I am not able to do it myself right now,instead what I tend to do is go to my Boss(the one whose deadline is most urgent) and ask them to extend for a few days here and there.More often than not it works.On Days it does'nt work? I lose Sleep and fight to complete the project.

    Cheers

    Ashish.

  16. Ashu001
    November 6, 2010

    Bolaji,

    Frankly speaking I am less worried about a Trade war and more worried about a Civil war between the Haves and Havenots in America today.

    According to the Latest BLS numbers( I can't find that Graph and Chart right now,searching for it);For The Poorest 20% of all Americans Food and Energy expenditures represent more than Half(58%) of their total After Tax Income.

    For the next poorest 20% ,Food and Energy expenditures accounts for 33% of their Total After Tax income.

    http://www.bls.gov/opub/focus/volume1_number6/cpi_1_6.htm

    Combined together the Poorest 40% of all Americans(who number over 200 million today) spend close to half their monthly Take Home Pay on Food and Energy.And thanks to Ben Bernanke's QE2(which increases the cost of all Basic commodities priced in US Dollars),the amount spent on these two vital neccesities (which no American can do without) are just going to keep going up and up ,until they lose their Patience and at which point-All Hell Breaks Lose.We will very soon see Gasoline at $4/gallon everywhere in America (latest by June 2011) and very soon we will Gas  at $10/Gallon everywhere as the Maniacs at the US Federal Reserve answer only to Wall Street and no one else.

    For a real idea of what the real world cost of Living for ordinary working Americans is(not for those clowns at the Federal Reserve or for those who write for the NYT) please see

    http://www.caseyresearch.com/editorial/3791?ppref=DLC175ED1010A

    The Other “Rich” country which also is doing extremely aggresive QE -The UK is atleast more honest about inflationary concerns for the poorest and most vulnerable members of society.

    http://uk.finance.yahoo.com/news/uk-s-rising-food-costs-push-shop-price-inflation-to-10-month-high-tele-2a62c3033b6b.html?x=0

    America(& the UK as well for that Matter) are very near Breaking Point.The moment Gasoline prices break above $4 for more than a month is (according to me) going to be the tipping point.

    Only two things can stop this death spiral of the US Dollar now.

    1)Ron Paul and his audit the Fed effort.

    http://af.reuters.com/article/metalsNews/idAFN0422739520101104?pageNumber=1&virtualBrandChannel=0

    2)A Debt Default in the Eurozone(where either one of Ireland,Greece,Portugal or Spain) gets tired of the Austerity Diktats imposed by Germany and opts to default on their debt and opts out of the Eurozone.Once that happens,The Euro(The Currency) will get crushed and the US Dollar will win by default.

    Its a sad state of Affairs for America that the only way America can maintain its current standard of Living is if a country far away from us Defaults on its Debts…

    Best Regards

    Ashish.

  17. Ariella
    November 6, 2010

    Ashish, I know exactly what you mean because my husband is an IT consultant.  The bank he works for is putting out a new software program with problems galore on thousands of computers.  It seems the fixes have to be done one computer at a time, and he is the only one assigned to that duty.  The mangers there could have benefited with some of the classes on planning projects and roll outs at IE University!  I recall Tom's warning to thoroughly plan and set realistic expectations and adequate time before jumping into cloud projects, and that advice applies to any IT project.

  18. Susan Fourtané
    November 7, 2010

    Hi, Bolaji 

    Would you say every single state in Europe in on high alert about terrorism? Maybe cutting the US military budget is different. I still believe there are some countries in Europe where a high military budget is not necessary and that same money could be spent in some other departments. 

    -Susan 

  19. bolaji ojo
    November 7, 2010

    Susan, I could not possibly say all European countries are at the same level of “terrorism” alert. They are not and cannot be. It's not necessary because they don't all face the same level of fear either in terms of military security or terrorism. Does that mean military budgets should be cut? Absolutely. I agree with you also on this. But will they be cut? I don't think so. This is the point I was trying to make.

    With all the noise about terrorism, politicians may not have the backbone to push through budget cuts. In the United States, it is quite obvious the military is the largest budget that needs to be pared back. However, no politician who advocates this would survive the next election. What I would like to know from your perspective is if this is the same understanding in Europe.

  20. Hawk
    November 7, 2010

    Ariella, I think you guys are exploring uncharted territories here. No company will split jobs just to make things easier for the employee. The reason companies engage in any kinds of juggling related to employees is only when it is in the company's interest.

    And back to the topic discussed by Anna Young, I think Europe's budget cuts are as much driven by fear as it is by necessity. The cuts will happen because they are what any rational person would recommend for businesses and households. A business, country or any other institution and individual should not continue to pile up debts just so “the economy can grow.” That's idiotic and it's what politicians in the United States recommend for their economy. The rest of the world isn't swimming in the same direction.

  21. Anna Young
    November 7, 2010

    Ashish, Sorry to disappoint you but that war between the “haves” and the “have nots” won't be happening on these shores or any other shores in the capitalist world. It won't happen in China either. Why? Simply because the rich have become smatter and are more focused on self-survival. They've distributed the wealth well enough and created a middle class, a group of people who's survival has become entwined with the rich class and who continually hope they too will one day join the “rich” class.

    The “have nots” aren't that many anymore and can't muster the crowd to go against the “haves” because the “haves” are more than the “have nots.” Do you count yourself amongst the “have nots”? Are you really one of the “have nots?” Is anyone reading this classifiable as a “have not”?

  22. bolaji ojo
    November 7, 2010

    Anna, The questions you raised are fair ones. So also is the import of confirming many of us here cannot claim to be in the group of “have nots.” Aside from cutting the budget to reduce debts, why are European governments so bent on austerity measures? Prehaps it's because they still believe that deficits and debts matter.

    There has to be some repercussions for spending more than what comes in whether at the government, corporate or individual levels. I know economies sometime need a booster shot but also it needs orderly growth and not the adrenaline rush to be had from a sudden injection of financial stimulus. I am not an economist although I do know when it's time to pay debts rather than accumulate more.

  23. Ariella
    November 8, 2010

    Hello, Hawk,

    I agree with you 100% that companies are motivated solely by their own interests.  The reason why some are willing to split jobs is because they get the skills, experience, and talents of people who otherwise may be forced to leave because they need a lighter workload.  Also they are likely to get more out of 2 people doing one full-time job than one doing it — for no more money — because the two will have more energy and so be more productive.  In truth, not every hour of an employee's weekly 40 is spent as productively as possible; there is some down time that must be figured into that.  But if two are working 20 hours, there would be far less downtime.  Plus the employees would feel loyal to a company that is willing to work with their schedule, and company loyalty also translates into better productivity as a result of improved morale.  So there are compelling reasons for a company to consider such an option.  Do I really believe that means it's going to happen, then?  Honestly, no.  Not because it doesn't make sense from a business point of view — it does — but because few managers are really capable of breaking out of traditional patterns in thinking about job definitions.  If a job as always been classified as done by one person for 40 hours a week, it will likely stay defined as such.

     

    I also agree with you that accumulating more debt is certainly not going to solve the problem.  Definitely, if someone has, say $50,000 in credit card debt, that individual has to do whatever is possible to diminish the debt, including making lifestyle changes to spend less.  However, sometimes people cut in one area while not really cutting the fat out.  

    For example, I know a family that is actually well off because they received their house as a gift and so have no mortgage.  However, they still have property taxes to pay and send their two young children to very high priced schools and very high priced camps.  So the wife — who doesn't work — decided to save money by not ordering hot lunch for her son at school.  While it seems like a smart move because she would save $500 a year, she still does have to provide his lunch from home, so it is not a complete savings.  Also I really don't get it because on any day the kids are off from school, she takes them out for pizza, and she goes out to lunch regularly, as does her husband. Dinner continues to come from takeout,. And she continues to have her groceries delivered at a cost of at least $5, though she lives 2 blocks away from the store, and to have weekly manicures.  Did I mention she doesn't work?

     Any way, the point of all this is that people point to the need to make budget cuts sometimes to justify cuts that make very little difference in the overall picture.  That is analogous to the queen's decision to cut the holiday party (which only takes place every other year) to save the 50,000 pounds that come out of her income. Her income is several million pounds  ayear.

  24. Jennifer Baljko
    November 8, 2010

    Anna, Ashish,

    Thanks for the clarification and useful background info. Much appreciated.

    Jenn

  25. Susan Fourtané
    November 9, 2010

    Hi, Ariella 

    Exactly! And let me emphasize here what you said “So maybe what is really needed during these economic times is a willingness to take a different perspective that would come up with new solutions for the shortfall rather than the usual knee jerk response of cutting costs by cutting jobs and departments altogether.” 

    If there would be such a company willing to jump out of the box and try something revolutionary which could, for benefit of all, help not only the economy of the company but also lowering the unemployment rate in the country, who knows how many beneficiaries there could be? New solutions and a new way of thinking is that could possibly help some European countries which are fighting to keep their economy as stable as possible, fighting cuts and all what comes along. What could it be done as a solution instead of cutting jobs and at the same time keeping the same companie's budget? Would employees be willing to reduce work hours in order to give space to a shared position gaining in free time to use for their own projects, families or leisure activities which are always postponed due to the lack of time and energy after long working hours? Could the CEOs see a benefit out of this, too? 

    -Susan

     

  26. Susan Fourtané
    November 9, 2010

    Hi, Jenn 

    The example you gave of the two women sharing a position in a company in the San Francisco Bay Area comes to show that this initiative can be possible given the right circumstances, which could help not only unemployment but also to keep the budget of the companies and the whole situation in Europe, as you also have pointed it out. 

    I wonder how the idea could be jumpstarted in order to reach the right mindsets who would be able to make a change. 

    -Susan

  27. Susan Fourtané
    November 9, 2010

    Hi, Ashish

    Here you have had another idea which could help, indeed, in the proposal of shared, part-time positions: “If these professionals go to their employer and tell them that please hire someone else on a part-time basis (and reduce my salary and hours) it would be an absolute gamechanger for sure.”  Now, how can this be achieved? Would there be a need for a certain kind of campaign offering certain benefits to the employees willing to submit to the idea of a shared, part-time position? Should the idea be proposed by the government to the companies and then to the employees? 

    -Susan

  28. Ashu001
    November 10, 2010

    Susan,

    Did I ever tell you the proposal was practical(given current Govt Rules and Regulations )??

    Thats the problem with Dreamers.We first dream up a world we would like to live in and then wonder whether or not if its practical!!!

    In my opinion,The Govt.should stay out of this concept completely(looking at their past track records of just adding unneccesary layers and layers of red tape to the whole process).

    Companies have to come up with some form of arrangement themselves and the most enlightened companies(who treat their employees more like Valuable assets) rather than commodities which can be used,abused and thrown aside at will;Will Benefit enormously with lower rates of Employee attrition and higher Employee satisfaction and of course that also results in Better work output.

    Yes,Yes I know half of this stuff happens only in Dreams…But then we can always dream on,Can't we?

    Regards

    Ashish.

     

  29. Susan Fourtané
    November 10, 2010

    Hi, Bolaji

    Last month, the New York Times published this  article alerting Americans planning to travel to Europe and stating that the European countries set at possible terrorist attacks were the UK, France and Germany, which in my opinion, can't be generalized as the whole Europe. I don't appreciate generalizations as a whole. It would be different if we were discussing about possible attacks in such and such countries in Europe.  Now, as a journalist, let me tell you that the press has responsibility here, too. If there is an American planning to travel to any Scandinavian country why should he experience unnecessary fear and be terrorized by the idea of dying in the middle of a terrorist attack?

    The same week, abc.net.au reported that the targets were likely to be tourist attractions and transport hubs in Germany, France and Britain. Again, far from being Europe as a whole. I am not saying this issue is not important. I am only stating the fact that to be able to speak about a general red alert in Europe more than three nations should be involved. In my opinion, news should be reported in a way that they don't confuse and feed the reader with fear or lead to more general panic than what they should. Someone going on a skiing trip to the Finnish Lapland, high up in the north and in one of the most peaceful places on the planet, shouldn't be afraid of dying during a possible terrorist attack being far away on the other side of the continent having some deserved time off. 

    Lufthansa  also warned  American tourism. Thinking about it, Germany, Britain and France are three of the major destinations for Americans. By rolling on a terrorist alert the economy of four major countries (US, UK. FR, GER) in the world is severely affected. What would it happen if these four countries enter in a war? WWIII? What memories the history of these countries bring to your mind? And yet, we shouldn't generalize. 

    Back to the military budget, those countries which have never been and will never be a target for terrorist attacks could safely reduce their military budget. So, to answer to your question, according to my perspective the need and understanding of the military budget in European countries is and has to be completely different from that of the US. 

    In the same way, even within Europe the need and understanding is and has to be different if we consider the countries in question, UK, FR and GER,and, for instance, the Scandinavian and northern countries which have a completely different background in history, past and present . 

    This time next week I will be writing in France. Hopefully, I will be able to report something clear from the very center of the matter. 

    -Susan

     

  30. Susan Fourtané
    November 10, 2010

    Hi, Ashish

    I think you're right about the government staying out of the concept as for the layers and layers of red tape. On the other hand, I wonder if it wouldn't be useful to standardize the concept in some way.

    I agree, enlightened companies is what is needed in order to come up with good, practical solutions. 

    Half of the stuff may happen only in dreams but what would life is if not a dream? 

    “Nothing happens unless first a dream.”- Carl Sandburg (1878-1967) American journalist, film critic, poet, historian, novelist.

    -Susan

  31. hwong
    November 30, 2010

    European are so used to live with good social benefits. Budget cuts might have negative effect on spending for short term. But for long term, it is good way to go. Obama's think tank member Lawrence Summers proved welfare generosity can actually hurt the economy in his PhD dissertation when he was a student at Harvard. The government might be able to stimulate the economy with extra budget. 

  32. SME_Business_services
    April 9, 2011

    In the last week, almost all EU governments have been slashing their budget deficits in order to prop up stock markets, blunt attacks on the euro and the pound and discourage the kind of speculation on sovereign, or national, debt which almost drove Greece to the wall.

    The cuts are supposed to reassure the financial markets that European governments take their whacking deficits and gargantuan accumulated debts seriously.

    The European Union's 27 governments have a total accumulated debt of nearly 80 per cent of the union's annual economy – about €9.5 trillion. Their projected total budget shortfall this year is 5.6 per cent of GDP – or about €600bn.

    Some countries are much naughtier than others. Greece, after three rounds of cuts, has reduced its projected deficit this year to 4 per cent of GDP – but its accumulated deficit is 125 per cent of its annual income.

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