Spiegel reports that calculations made by the Cologne Institute for Economic Research “indicate that only €4.7 billion ($6.16 billion) of the €11.2 billion in austerity measures stipulated by the savings package actually took shape in 2011.” Similarly, they find that “for the coming year, the concrete measures that have been agreed on so far cover just one-third of the announced amount of savings.”
Hypocrisy always rankles a bit in life, but let’s all take the time to say good for Germany on this. Southern European countries desperately need demand from Northern Europe and most of all from Germany. That means Germans sipping Spanish wine, Germans lounging on the beach in Greece, and Germans munching on some nice prosciutto de parma. It might feel like Germany is under some kind of obligation to engage in solidaristic austerity, but in reality this would be completely counterproductive. What Germany should be asked to endure is not the pains of austerity, but the pains of somewhat higher inflation so that Spain and Italy can at least enjoy appropriate monetary conditions as they attempt to pull off some very difficult economic reforms.