Two major elections, this past weekend saw an overhaul in management in two European countries, France and Greece.
In France on Sunday, Francois Hollande squeaked past his opponent to win a clear majority for president. On the same day in Greece, the conservative-leaning New Democracy party and the Left Coalition party won the largest parliamentary pluralities. What is the same in both contests is that all of the victors ran on campaigns rejecting austerity measures that they claimed had crippled their respective economies, in favor of stimulus spending. Though it is only France and Greece that held elections, there appears to have emerged a widespread demand for reconsideration throughout Western Europe of the euro zone's recovery plan. And while the winning parties in Greece scramble to emerge from chaos and form some sort of ruling coalition, Hollande is secure as president, and has become the leader of this new movement, which will likely see major changes to the unity and economic integration of Europe.
At the beginning of the year, 25 out of 27 European Union countries signed on to an agreement to commit to austerity measures to cut national spending to a level that was less than 3% of national output. Labeled in France as the “Merkozy” plan, due to it being peddled by German Chancellor Angela Merkel and the now former French President Nicolas Sarkozy,, it attempted to put the EU back on track by reducing national debts, and saving a few countries, in particular Germany, from having to bail everyone else out.
The cuts prove to be harder to do for some countries than others. The French and Greeks have a centuries-long tradition of depending on bloated government budgets and over-staffed public departments to keep employment strong. These new measures appear to not only attack their national self-esteem as prosperous industrial countries that are now over-leveraged and debt ridden, but also to a cultural identity attached closely to state-sponsored entitlements. Replacing a leisurely Mediterranean lifestyle in favor of cold German efficiency is hard to swallow.
Of course the fact that austerity measures have resulted in slow economic recovery and slow job growth has spawned general discontent comes with good reason. Hollande declared that it is not cost cutting that Europe needs but investment, and growth, and the governments must lead this. 51.6% of French voters agreed with him.
And it is not just a bare majority of French voters who back this, all over Europe austerity has
As of Sunday, Hollande has emerged as the new champion of the anti-austerity cause. The spend and grow parties that won pluralities in Greece have been unable to form a governing coalition. The problem, none of them have a majority, and other then their views on austerity, they are on opposite ends of the political spectrum, and so agree on nothing else. Since other countries in Europe have no new leadership other than those who implemented Merkozy, and with no leadership in Greece yet, it will be up to Hollande to take charge. The fact that he is president of the euro zone’s second largest economy also gives him credibility.
Hollande has already put Angela Merkel on notice. He wants to renegotiate right away. Merkel has already declined, and though she has stood strong some analysts suggest she may be flexible. With a continent-wide movement, and strong leadership in Hollande, the pressure will be put on her to change her stance, or else face devastation in Europe.