PARIS: European leaders are caught between former White House chief of staff Rahm Emanuel's injunction "You never want a serious crisis to go to waste" and Luxembourg Prime Minister Jean-Claude Juncker's admission that "We all know what to do. We just don't know how to get re-elected after we've done it."
Signs of reform fatigue are growing in euro zone countries as bond market pressure for a radical budget and economic overhaul has eased slightly.
While several governments have pushed through changes in pension, employment and welfare systems that would have been unthinkable before the currency area's debt crisis, the reform push is losing momentum in the face of political resistance.
Italy's unelected prime minister, Mario Monti, made a veiled threat to quit this week for the first time in an attempt to force through a shake-up of labour laws intended to make it easier for companies to fire workers.
Monti warned Italians that his team of reforming technocrats might not stay in office until a 2013 election if trade unions and politicians picked his plan apart.
"If the country, through its labour organisations and political parties, does not feel ready for what we consider a good job, we would certainly not seek to keep going just to reach a particular date," he said.
An opinion poll by the ISPO agency published on Sunday showed two-thirds of Italians have a negative view of the reform agreed by the cabinet last week, and Monti's own approval rating fell sharply as a result.
Significantly, Monti chose to put the legislation through parliament as an ordinary bill, which will take months of deliberation and possible amendment, rather than forcing it through by decree as he has done with pensions reform.
Other moves to liberalise professions and boost competition have been watered down by powerful interest groups such as taxi drivers and lawyers.
At the same time, Spanish voters denied conservative Prime Minister Mariano Rajoy the outright victory he had sought in the southern region of Anadalucia as a mandate to pursue bolder fiscal and structural reforms.
Rajoy's centre-right People's Party won the biggest score in the historic Socialist bastion, but a combination of the Socialists and the hard left won more seats and may be able to govern the region in opposition to Madrid.
LIMITS TO REFORM
Rajoy pushed through a substantial labour market reform in his first weeks in office, making it cheaper for companies to lay off workers and decentralising wage bargaining to reduce trade union power.
The Spanish leader faces the first general strike since November 2010 against that reform and deeper austerity on Thursday, a day before he presents a tough 2012 budget in the midst of a recession.
But there are limits to his government's reformist agenda and some of the most intractable problems in Spain involve the prerogatives of the autonomous regions, which have expanded continuously since the end of fascist rule in the mid-1970s.
"The structure of the country is not being reformed - the regional system, the size of the public administration, the tax and spending powers given to the regions," said Jose Maria de Areilza, a law professor at the IE business school.
"Everyone wants to keep up with the Catalans," he said, referring to the wealthy autonomous northeastern region.
Reforms also face resistance from the lobbying power of entrenched interests such as energy companies and banks, which had long captured their regulators, he said.
Two years into the euro zone's sovereign debt crisis, a new treaty to strengthen fiscal discipline, a flood of cheap European Central Bank lending to banks and a deal to avert a chaotic Greek bankruptcy have cooled panic on financial markets.
indiatimes.com
Signs of reform fatigue are growing in euro zone countries as bond market pressure for a radical budget and economic overhaul has eased slightly.
While several governments have pushed through changes in pension, employment and welfare systems that would have been unthinkable before the currency area's debt crisis, the reform push is losing momentum in the face of political resistance.
Italy's unelected prime minister, Mario Monti, made a veiled threat to quit this week for the first time in an attempt to force through a shake-up of labour laws intended to make it easier for companies to fire workers.
Monti warned Italians that his team of reforming technocrats might not stay in office until a 2013 election if trade unions and politicians picked his plan apart.
"If the country, through its labour organisations and political parties, does not feel ready for what we consider a good job, we would certainly not seek to keep going just to reach a particular date," he said.
An opinion poll by the ISPO agency published on Sunday showed two-thirds of Italians have a negative view of the reform agreed by the cabinet last week, and Monti's own approval rating fell sharply as a result.
Significantly, Monti chose to put the legislation through parliament as an ordinary bill, which will take months of deliberation and possible amendment, rather than forcing it through by decree as he has done with pensions reform.
Other moves to liberalise professions and boost competition have been watered down by powerful interest groups such as taxi drivers and lawyers.
At the same time, Spanish voters denied conservative Prime Minister Mariano Rajoy the outright victory he had sought in the southern region of Anadalucia as a mandate to pursue bolder fiscal and structural reforms.
Rajoy's centre-right People's Party won the biggest score in the historic Socialist bastion, but a combination of the Socialists and the hard left won more seats and may be able to govern the region in opposition to Madrid.
LIMITS TO REFORM
Rajoy pushed through a substantial labour market reform in his first weeks in office, making it cheaper for companies to lay off workers and decentralising wage bargaining to reduce trade union power.
The Spanish leader faces the first general strike since November 2010 against that reform and deeper austerity on Thursday, a day before he presents a tough 2012 budget in the midst of a recession.
But there are limits to his government's reformist agenda and some of the most intractable problems in Spain involve the prerogatives of the autonomous regions, which have expanded continuously since the end of fascist rule in the mid-1970s.
"The structure of the country is not being reformed - the regional system, the size of the public administration, the tax and spending powers given to the regions," said Jose Maria de Areilza, a law professor at the IE business school.
"Everyone wants to keep up with the Catalans," he said, referring to the wealthy autonomous northeastern region.
Reforms also face resistance from the lobbying power of entrenched interests such as energy companies and banks, which had long captured their regulators, he said.
Two years into the euro zone's sovereign debt crisis, a new treaty to strengthen fiscal discipline, a flood of cheap European Central Bank lending to banks and a deal to avert a chaotic Greek bankruptcy have cooled panic on financial markets.
indiatimes.com
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