Calls for looser fiscal policy likely to go unheeded

There have been renewed calls for a relaxation offiscal austerity during the past month or so,primarily aimed at the surplus countries and, inparticular, at Germany. However, Germany’sgovernment clearly intends to plough on with itsbalanced budget regardless of external criticism,and the UK and Japan are still on track for furtherausterity. The governments which appear to beeasing up on austerity are those in countries wherethe argument for doing so is weakest – notablyFrance.