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Something is Rotten in the Eurozone

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NICE, France — “Hollande est un grand homme. Il vas sauver nous et la nation.”

I overhead this little gem, as much as my understanding of French will allow, Friday morning while sipping un café at a seaside establishment in France’s fifth-largest city. François Hollande was elected the next president of the French Republic by a margin of 3.4 percent earlier that week. Not an impressive margin by any means, but for Hollande to get through to take on the incumbent Sarkozy and win proves that socialism is alive and well in the Gallic nation.

According to my eavesdropping, M. Hollande, “Is a great man. He will save us and the nation.” I have only one thought with regard to the word “save,” given Europe’s zombie-like financial and economic situation. But for French voters, the opposite, in which spend equals save, is true.

No doubt Barry O. called Hollande up to congratulate him and ask for pointers. “Let me know how you keep your people in line, François,” I can hear Obama saying. “It could come in handy for my second term.”

France, however, was far from alone in advocating reckless spending and increased state control. Greek voters rejected austerity measures aimed at curbing the Greece’s spiralling debt, no doubt caused by generations of lavish welfare programs and too-generous public pension plans, during last week’s legislative elections. Greece already had a socialist party (PASOK) sharing parliamentary power with the center-right New Democracy party, but both parties had worked on a savings plan and backed the EU bailout agreement. However, the Coalition of the Radical left (SYRIZA) party, which now has 52 seats (out of 300) in the Greek parliament, has vowed to block any further coalitions, thus threatening to jettison the bailout agreement based on the “barbaric” austerity measures  within which it will force Greece to live. SYRIZA has essentially replaced PASOK as Greece’s main left-wing party and they are clawing the ground like agitated roosters, chomping at the bit to play a game called leverage with the national budget.

Britain, too, had “mid-term” parliamentary elections. The classically socialist party, Labour, gained substantial ground. Much like the results in Greece, the two coalition parties in government (the centre-right Conservatives and the left-wing Liberal Democrats) were punished for the cuts they tried to make, and Labour profited from the anger voters felt toward the Conservatives and Lib Dems.

However, what happened here in Britain is not necessarily bad news. Although the breakdown in Parliament after the election stands at Labour 39 percent, Conservatives 31 percent and Lib Dems 15 percent, the Conservatives can make up the eight percent difference in two years if they are careful. Most voters have not forgotten that “New” Labour got Britain into the financial mess in the first place and a lot of pro-Labour votes were designed to simply send a message.

The Conservative party did achieve one goal: the reelection of Boris Johnson as Mayor of London, a politically important position. Johnson beat Labour’s Ken Livingstone by 51.5 to 48.5 percent. In fact, three London councils whose votes went to Labour MPs also voted by a majority to retain Mr. Johnson. This fact alone tells me that the Labour vote was a protest vote.

It must be said that the Conservatives and their Liberal Democrat partners have been slashing whatever they can; including police, immigration control and the military. Those three things are the stuff any sane citizen would want the government to pay for and provide. They also need to have a serious look at the future of libraries, post offices, transportation and youth programs. I share with the British the conviction that just because something is public does not always mean it’s superfluous, pointless or wasteful. Some public services, such as those I mentioned, can be scaled back, but must be kept strong enough to survive. My anger is directed at public unions who demand pensions that private sector workers can only dream of, not my local library or post office. I am not impressed when any government stipulates that the military needs to be cut to achieve savings in the budget, but nonworking families, many of whom haven’t worked for generations, still receive a vast array of benefits.

France is a lost cause once more, and Greece remains as messed up as always, but Britain continues to keep its economic head just above water and operates with a political system that is more pro-free market than not.  Germany continues to lead the way in Europe, with “the Decider,” Chancellor Angela Merkel, at the helm with a recent 77 percent approval rating among Germans.

An uneasy week for Europe, to be sure. Europe is always uneasy. But only future elections and results will decide the fate of this continent. All’s not completely lost. Yet.

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  • Well, apparently Someone isn’t happy about Hollande’s victory. His plane just got struck by lightning.

    Not sure your narrative really works, Mark. For instance:

    “…Greece’s spiralling debt, no doubt caused by generations of lavish welfare programs and too-generous public pension plans”

    No doubt? That’s all it was? Nothing to do with the endemic corruption and nepotism rampant in Greek politics?

    Also, Britain did not have “mid-term parliamentary elections”: they were local council and mayoral elections. These are traditionally used as a way to register displeasure at the sitting government, and are seldom a good indicator of the way the next general election will actually pan out.

    They can also be coloured (as, actually, they should be) by local issues and personalities, hence the re-election of the popular Boris Johnson as London’s mayor against the prevailing pro-Labour trend.

    Also, how do you read that 77% approval rating of Chancellor Merkel’s in light of the state election result in Nordrhein-Westphal, in which her party got hung out to dry? It is a heavily industrialized state in which the political left is very strong, but it’s the trend that’s noteworthy.

  • roger nowosielski

    What is it precisely that you’re afraid of, Mark? I don’t exactly see that Hollande’s election signifies bad times for France could well lead to more responsible, conservative management of France’s affairs.

    Perhaps I don’t share your level of confidence that the interests of the European bankers necessarily coincide with the well-being of the individual member states. In any case, it would be interesting to see just what might develop if they suffer a rebuff.

  • Glenn Contrarian

    Hey Mark –

    Why is it that (except for the oil-rich Middle East) precisely ZERO first-world nations don’t have high taxes and significant social safety nets? And why is it that precisely ZERO nations that have Really Low Taxes and no social safety nets to speak of are first-world nations?

    Care to take a stab at that?

  • Glenn Contrarian

    Didn’t think so.