Austerity promises by three new governments fail to stem euro crisis

AUSTERITY promises by three new governments in Italy, Greece and Spain failed to stem the spreading crisis in the eurozone yesterday, as did promises of a blueprint for a eurobond to be announced tomorrow.

The news that Hungary had applied to the EU and the IMF for precautionary funding served as a reminder that countries outside the eurozone were prone to contagion, as various moves which Budapest made over the past year failed to protect them.

But Greek prime minister Lucas Papademos managed to convince Brussels of his government’s commitment to the deal struck on October 26 sufficiently to have eurozone finance ministers agree at their meeting next Tuesday to pay the sixth loan tranche worth €8 billion, said EU Council president Herman Van Rompuy.