French crisis part of wider austerity debate

The eurozone’s flatlining economy took another hit yesterday when data showed German business sentiment sagging for the fourth month running, while a row over the lack of growth led the French government to resign. 

Politicians and policymakers, meanwhile, were digesting European Central Bank President Mario Draghi’s about-face on Friday, in which he called in a landmark speech for governments to use fiscal stimulus to revive the eurozone economy.

His comments were similar, if less direct, than those made on Sunday by leftist French economy minister Arnaud Montebourg, who condemned fiscal “austerity” and Germany’s “obsession” with budgetary rigour, triggering yesterday’s government resignation.