Austerity cuts rejected by France and Greece

Austerity cuts rejected by France and Greece

May 7, 2012

“Austerity can no longer be something that is inevitable,” newly-elected French President François Hollande said after drubbing President Nicolas Sarkozy. Not only is that the new political mood in France but it’s the sentiment in Greece as well.

“In all the capitals… there are people who, thanks to us, are hoping, are looking to us, and want to reject austerity,” said Hollande during his victory speech. “You are a movement lifting up everywhere in Europe, and perhaps the world.”

Not so fast you, commie. Germany’s Chancellor Andrea Merkel might have something to say about Hollande’s anti-austerity rhetoric. “We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries,” she said.

Marine Le Pen, leader of the right-wing Front Nationale, who was critical of both Hollande and Sarkozy during the campaign, said “So Hollande has arrived with promises of big projects. Like Nicolas Sarkozy, first he will let down his supoprters and then he will let down the whole of France.” Considering Germany’s economic might, Le Pen might just be right. Hollande may well find it extremely difficult or impossible to reverse course on Germany’s EU austerity plan, and will therefore be forced to compromise.

It’s also helpful to remember that France has been in the midst of austerity imposed by Sarkozy and it doesn’t seem to be working.

According to a paper written by Laurence Ball, Daniel Leigh and Prakash Loungani for the IMF (International Monetary Fund), which looked at 173 episodes of fiscal austerity over the past 30 years, austerity “lowers incomes in the short term, with wage-earners taking more of a hit than others; it also raises unemployment, particularly long-term unemployment.”

“What bullshit communist propaganda is this,” frothy-mouthed right-wingers must be crying.

In Greece, New Democracy’s leader Antonis Samaras is two seats shy of forming a coalition government with Pasok, a socialist party. Samaras has three days to form a coalition but with anti-austerity sentiment being what it is in Greece, it will be a tall order. Since Samaras has failed, the task now falls to Syriza (Coalition of the Radical Left).

Clearly not pleased with either party, Greek voters swung toward smaller left-wing and right-wing parties, increasing their presence in the Greek parliament in the process. Syriza, for instance, saw its political fortunes increase to 16.8% of the vote and 52 seats. They are now the second largest majority in the parliament.

“European leadership and especially (German Chancellor Angela) Merkel have to understand that austerity policies have suffered defeat,” said Syriza’s leader Alexis Tsipras said Sunday, calling the election results “a message of a peaceful revolution.”

There has been talk of a new round of Greek elections as soon as this summer. For now, the anti-austerity crowd in Greece should see this as something of a victory, especially with France there to back them up in the EU.

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