I haven’t had the time to read any analysis yet, though I heard a little bit on NPR this morning. Basically the Socialists regained power in France on an anti-austerity/pro-stimulus spending platform (as well as a “unity” platform against the anti-immigrant tide). Apparently newly elected President Hollande is going to pick up the phone to argue with Chancelor Merkel immediately. Anybody know when Germany is up for elections? Does their system have a no-confidence vote?
Then in Greece even the Socialists who signed off on the Conservative Party’s austerity measures took a hit, and together the two main parties took under 35 percent of the vote with a slew of what NPR described as “extreme left and right parties” taking the rest. One of the left parties actually slipped into second place with 17 percent of the vote. Scary is the fact that the country’s neo-Nazi party went from one percent to seven percent, again over the austerity measures, but France’s more enlightened “unity” vote doesn’t seem to have rubbed off on Greece, which is suffering from 21 percent unemployement and a huge poverty rate. There is no governing coalition at the moment.
Basically, the voters in both countries aren’t in the mood to tighten their belts to bail out the financial system. I haven’t looked, but I imagine that stock prices have tumbled this morning as they get jittery whenever any news comes out of Europe about potential debt defaults.
If Europe had joined the US and China in an international stimulus program two years ago, we might not be here. But for some reason conservatives in every country refuse to acknowledge that sudden and large cuts to spending when markets are in contraction actually exacerbate the debt problem, meaning that austerity measures are actually counterproducitve even if your concern is obsessed with debt to the exclusion of all the other economic concerns.
I would appreciate links to good articles you find on the subject. Thank you.