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Eurozone ministers pave way for looser budgets, fail on Cypriot deal
The 17-country bloc representatives for finance cleared the path for somewhat lissome budget policies, citing the Italian reaction against austerity measures that pushed Italy into political deadlock in the past couple of weeks.
Italy’s inconclusive elections, Frances refusal to make further budget cuts and escalating southern Europe protests against the worsening welfare states fueled publics anger against German-led measures for reducing the debt crisis effects on nations.
European Union Commissioner Olli Rehn told reporters after the meeting that economic strains “may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits.”
Germany`s Chancellor Angela Merkel indicated that budget cutting was at the appropriate amount and it was not overdone. “We’ve done quite a bit to consolidate budgets, but we always have this discussion about growth, and don’t quite have the answers to where the growth should come from,” Markel added.
The Eurozone finance ministers also discussed the Cypriot bailout; they refused to rule out a bailout deal for Cyprus even after concerns over signs of capital flight from the island. Finance ministers said the talks over Cyprus aid package will drag on until late March.
The International Monetary Fund (IMF) also insisted that Cyprus loans come with measures to reduce the country’s debt burden, conjuring last year’s standoff over Greece`s aid.