hollande

Yesterday, François Hollande was elected French President on an anti-austerity platform (making him only the second socialist president in the history of the Fifth Republic). The Greek mainstream political parties, meanwhile, received a battering in elections on Sunday to the Hellenic Parliament. The two main parties, the centre-right New Democracy party and centre-left PASOK, have seen their combined support collapse from  79 percent of the vote at the last elections to only about 32 percent yesterday. Of the 300 seats up for grabs, 151 have gone to parties that reject the Greek EU/IMF bail-out deal, making it impossible for the pro-bailout parties to form a government on their own.

Is the consensus for austerity being smashed by a resurgent European left? Or will Mr Hollande find his options limited once in office? And what does the political chaos in Greece mean for Europe? Before the elections, we spoke to Sylvie Goulard, a French MEP with the liberal Mouvement Démocrate party, and put some of your comments on the eurozone crisis to her.

First up, Alison sent in a comment arguing that: “There is no allowance for growth for Europe to get us out of this mess. We’ll be back to square one in a year to two years.” This was, essentially, François Hollande’s line during the French election campaign. Is Alison right?

Well, she’s right… but one has to understand perhaps why. The reason why some member-states have insisted so much on discipline is because the basic deal made when we created the euro explicitly stated there would be no emergency financial assistance for member states. Of course, I can personally understand the demand of Alison, and she’s right, but I can also understand why public opinion is traumatised by what happened, and why some people have been calling for tougher rules… To genuinely boost growth, you have to agree to structural reforms, labour market reforms and many other measures that politicians hate. You do not immediately see the results from these kinds of reforms and it’s painful.

Next, we had a comment from Andreas arguing that: “The only solution for Greece to see better days is to default and return back to drachmas.

No, I belive it would be much worse for a country to leave the eurozone. If you leave the eurozone you will just increase your burden of debt whilst also removing the support from the other member-states… We should help Greece to rebuild a strong national economy, based on research, tourism, industry, shipping, etc. A Greek exit now might also provoke contagion effects to the rest of the eurozone. If Greece goes, what about Portugal? Or Ireland? Or Spain? Or other countries?

Finally, Michael from Greece sent in a comment calling for much closer economic and political integration as a solution to the crisis: “If Europe has common problems then Europe has to have common solutions. A common Eurobond is one of them and many others should follow.

You cannot say right now, in the current situation, that we will create a eurobond. On the other hand, we should not exclude it in the medium-to-long term. The first step is to boost trust and growth. After some years, it might make sense to have common issuance of bonds. But it’s not a decision we can take now. The key reason for putting our debt together is not the eurocrisis, it’s the reason we adopted the euro in the first place. It’s to have a global reserve currency, with a deep and liquid bond market.

What do YOU think? Do you agree that austerity and structural reforms, whilst painful, are still the best way to return to growth for Europe? Or have the French and Greek elections changed everything? Is there still a consensus for austerity in Europe? How will the Greek election results affect things, especially if a political deadlock develops with a government unable to form. Let us know your thoughts and comments in the form below, and we’ll put them to policy-makers and experts for their reactions.

IMAGE CREDITS: CC / Flickr – Parti socialiste

36 comments Post a commentComment


  1. Zied Smat

    l’union fait la force, kiss fench, c’est l’esprit français de tout les temps

  2. Joe DaSilva

    Well they may want to change whatever, and not agree with austerity, but if they have no money, they can’t spend it

  3. Tudor Poulter

    Do the french not know what happens when a socialist gets in to power in france :see 1936 to 1945, germay, Italy the list of times and places go on just wait and see the camps, gardes and death squades march through that place and the sheep will walk in happily to there death just like real sheep to there own deathall you have to do is NOTHING

  4. Ger Icb

    The best way to return to growth is to stop bailing out the bondholders.

  5. Gerry Mavris

    Germany and the rich northern European states should stop behaving like FREE LOADERS on the backs of the Greeks, when it comes to the defence of the borders of the European Union against the hordes of illegal immigration from Turkey. Since Germany is the richest of the Eurozone , Germany along with other northern European States should stop hiding behind Britian’s hostility to a strong EU Defence Force, stick a finger up at Euro-sceptic Britain and finance the Defence of the borders of Europe, from hordes of illegal immigration from Turkey, because Greece cannot do it by itself. Germany would not want hordes of illegal immigrants in the Eurozone and the EU, just like Greece did not like either. In this way the Hellenic defense budget can be reduced drastically with a solid European shield, and Greece would have balanced budgets, with the EU Defence force stationed on the Greek eastern front and Cyprus, blocking the entrance to all illegal immigrants who come to Greece and European Union via Turkey. Euro-sceptic Britain and Turkey are both attacking simultaneously the Euro-zone and the European Union with their hostile actions. This is no time for Euro-zone Diplomacy but for action. BRING ON a professional EU Defence Force.

    • Apostolis

      maaaan thats my thought too. If the EU could guarantee for the safety of my country , our economy would be prosperous. The real problem is not the illegal immigrants but the constant fear of the turkish invasion in the aegean islands. We have one of the strongest army in the world (i think our ranking is 30 something) while our economy bleeds day by day and we just can’t afford it

  6. Gerry Mavris

    As the former Bundesbank head says – There should be greater transfer of wealth – human resources , industrial resources, commercial resources, military resources and financial resources – from richer parts of the eurozone to poorer parts within the European Union Federation we call the Eurozone so it can operate effectively. The Euro in its current flawed form needs to be refined so an effective equilibrium can be found to cater to all members of the Euro-zone Federation, similar to how the U.S economic and monetary union system works in the United States, where there is a effective monetary transfer union from the richer U.S States to the poorer U.S States. This is EXACTLY what British Governments for decades have rejected, and is the reason why Greece and other Euro-zone countries are struggling and suffering within this flawed Euro-zone Federation. Britain is completely responsible for this economic stress in Greece, Spain, Portugal, Ireland and Italy. The flawed Euro-zone Federation has suited French and German business interests, but not the EU interest. France and Germany should stop hiding behind the British Euro-sceptic stance in the interest of European Union, endorsing the transformation of the Euro-zone currency area into a Euro-zone economic and political federation through the Enhanced Co-Operation Mechanism which is available within the EU treaties , which was also used to overcome British objection to the creation of the Euro currency, so the Euro-zone can acquire all the necessary mechanisms and functions which are required for an effective system of monetary, economic, and political governance for the Euro-zone. France and Germany lead the Euro-zone refinement for the Euro NOW.

  7. MandyandPj Leneghan

    Crikey Gerry, the problem isn’t immigration westwards but hordes of heavily armed nazi-like forces maundering eastwards CAUSING the destabilizing of nations to the east, the resulting symptoms being to name two, the mass movement of peoples and the increased threat of retaliation aka terrorism. The EU is doing pretty good with a so called defence force as such and its EEAS is a sight to behold indeedeeoh. If really interested in the defence of Europe, I agree, that logically an EU defence force should be established, that is a defence force and not an offence force. NATO should be given the boot and all foreign (US) weapons of mass destruction should be booted out of Europe. And the EU and its member nations should keep their noses, sanctions and their bombs out of other nations affairs. As for the topic heading, ‘consensus for austerity in Europe’, consensus among whom? The rich and powerful along with their puppet governments? Let us hope that Hollande is a real socialist as opposed to some of those pretend ones in the EP and gives the global gangster cabals a good run for their money. I hope that Hollande can rally the anti-mafia capitalist forces so that we the people, will have a base from which to take these global criminals on and take them out. If the current economic model does not provide for the needs of the people, remove it and establish one that does..pj

  8. Melinda Vass

    I don’t think, that the French election would break the consensus, the effect of the Greek election is yet matter in hand.

  9. Albert Saxén

    Joe it no so much is a q of spending as saving ..

    Which Tudor? ‘cos ..communists, Nazis..same shit
    n socialism is where that comes from

    Depends which.. did ppl ever ask for cutbacks? austerity?

    .. no.

  10. Nikolai Holmov

    Was there ever a consensus on austerity in Europe?

    Between the politicians maybe. Amongst those who put the politicians where the are, certainly not.

    Once again, democracy will undermine the best laid plans of the EC, EU, sovereign governments and the globalised markets and quite rightly too if that is the will of the people.

    The problem, if there is one, is that not many of the electorate will vote for pain as the politicians in favour of austerity have completely and utterly failed to make their point with the voters.

    Thus a populist backlash can be expected when politicians fail to make their case well enough.

    That is true of austerity or spending your way out of the mess just as equally.

  11. Franck Houssou

    The deal is expected to change with the election of Francois Hollande. I think our leaders must quickly find reasonable compromises between austerity and recovery plan without giving blank checks, because the people will not be patient forever. The proof is that neo-nazis have just entered the Greek parliament. This is Worrying! For me, this is not trivial and could happen anywhere they do not pay attention to the pain of the people.

  12. Eusebio Manuel Vestias Pecurto

    Eu sempre estive de acordo com as medidas de austeridade porque tivemos alguns governos na zona do Euro que nunca fizeram nada para abaixar e o Defice agora quanto mais medidas de austeridade a zona do Euro tiver pior para a Europa a Europa deve criar um modelo de crescimento sustentável

  13. Ozcan

    They can vote what they want but it doesn’t change a thing, The Euro is still under severe pressure and it drags down the entire continent into the gutter. We are not only facing a financial catastrophy but also a cultural one. Perhaps Greece is the first place where democracy fights back against the dictatorship of socialism.

  14. Christos Mouzeviris

    http://eblanademocraticmove.blogspot.com/2012/05/greek-and-french-elections-2012.html The people have spoken, and their message is clear.. they do not want austerity, they want stability, prosperity security and national pride. They want jobs and growth.. The more our leaders ignore them, populism, the far right and the far left will entering Europe’s politics, for the detriment of our people and continent. The Greek public’s turn to the far right, is only because their leaders were ignoring their concerns on the economy and the growing problem of illegal immigration. It is shameful for Greece, but I do not blame the people…It was expected..It happened in France too last week, and in other European countries. In Finland, Belgium, Holland, Austria and Hungary among them. Our leaders should get the message and act.. My blog post above says it all more extensively…

  15. Dorian Bratu

    It’s not about being against de austerity policies, but against the so-called specialists of the IMF who managed to bankrupt Ecuador and destroy the Argentina’s economy. We are against the theoretists and we want people who know what mwans austerity and lives with it, not impose to us the austerity policies and they live fine with huge wages!

  16. Victor

    German austerity based on clavinist religious protestant parochialism and an inability throughout Germany’s history to see the big picture is leading Europe to the third world war. When will the Germans wake up and realise this? Do they not realise that they are actually causing genocide in Greece with 1,5 million people unemployed, with 3 million people living with less than 300 euros per month, with 120 suicides per month, 950,000 people homeless and people literally dying of malnutrition, hunger and starvation? What else needs to happen for these criminals in Brussels and Berlin to get the message that their punishment via austerity is killing people all over the south of Europe. Greece should negate payments like Argentina and Ecuador and call-in an international team of analysts to check the true deficit as the whole thing which has been created in Greece is a hoax so that big rich multinational corporations and banks can get rich at the expense of sovereign nations. NO, NO, NO, this will not pass any longer. Europe must stop being run like a company and countries should be run as countries considering that they are made up of human beings and not of balance sheets. Enough with this numbers palava and craziness.

  17. Oliver

    There was never a “consensus on austerity”. Some political movements preferred pure austerity, others saw that reforms were necessary, but wanted to flank them with growth initiatives. Hollande is far from the anti-austerity guy he is made to be by some. Rather, he advocates saving where possible and investing where needed.

    As for the Greek, people like the far left leader who proclaimed today he is against repaying any debt whatsoever will have to learn that nothing in life is free. If he’s not repaying, he will not get any money. And far from the people being better off, they will be worse off. Greece has avoided going with the times for quite a while and now they are paying a heavy price for that. But there is no way out for them that will not be painful. Even if they leave the Euro, it will not give them more self-determination but less, as essentially, the entirety of the country will be available in the bargain-bin for dollar- or euro-paying investors, and they will need that cash badly to pay for imports. In the end, essentially Greece will practically be foreign-owned. It is evident that things can and must be better handled in Greece than they are being handled now. But it is equally evident that simply maintaining the status quo is not an option either. And any group, party or union refusing to allow reforms is living in la-la land and, contrary to their claims, not acting in the best interest of the people.

    As for the IMF, Dorian, you clearly are more spooling ideological programs than doing any actual analysis. If you did, you would know that the IMF is actually arguing AGAINST pure austerity.

  18. Christos Mouzeviris

    Dear Oliver, the debt is not Greece’s, or Ireland’s or Portugal’s in the first place to be repaid by those nations… The debt is accumulated from the exposure or the European banks, mainly the French, German and British to the toxic debt coming from USA.. You obviously forget the fact that Germany’s economy was in tatters after the re-unification and its recovery was based on high inflation of those nations that now are in debt and crisis and Germany’s trade surplus against those countries.. In other words, our then booming economies contributed to the fixing of the then limping German economy, only to be forced now into an austerity BY GERMANY AND ITS ELITE.. Not only we helped them but now we pay their debt too… If someone has to pay then it is Germany above all, if not all of the eurozone!! As it is happening.. But please stop this nonsense about “the Greeks have to learn to pay back” because that lesson must be learned by the Germans first….

  19. MandyandPj Leneghan

    Christos, one of the illusions that exists that undermines democracy is accepting these politicians as “our leaders”. The are not our leaders but our representatives, that job being in fact a tempory one. They do promote and exploit the misconceived notion of leader or ruler by a variety of methods and scams. What we need is a workable means to be able to sack/fire them at any time, when their delusions of rulership go too far. As well as an automatic instant dismissal process when they break the law or other conventions. What we have are more like elected dictators…pj

  20. Oliver

    Dear Christos, sorry to say, but comparing the Greek situation to Ireland is frivolous at best and dishonest at worst. The debt/GDP ratio in Ireland was far better than that of Greece before the crisis. More, they were actually moving to reduce it, and quite successfully. At the same time, the greek debt/GDP ratio not only was twice that of Ireland, it made no positive development whatsoever. And the same holds true when comparing Greece with Spain. Portugal and Italy did not improve their debt/GDP ratio, but Portugal started on a much lower level than Greece. When your debts are larger than your GDP, it is a given that the moment those who gave that money to you are themselves tight on money, they’re going to panic as to whether you’re actually going to be able to repay all of that.

    As for Germany, its economy was never “in tatters”, and after reunification, pretty drastic reforms were undertaken. So drastic that it cost the government which enacted them its reelection. Given that Germany has been a net payer into the EU for ages, also in the period you claim its economy was “in tatters”, your suggestion that Germany “should learn to pay back” is another very creative interpretation. Not the least given the fact that Germany IS paying massive amounts of money and that you’re facing very serious problems not from the German “elite” (nice conspiracy theory, there, by the way, given that austerity is far from supported throughout the German “elite”), but from the taxpayer who would like to have some minimal guarantees that he or she is not throwing money into a black hole but actually contributing productively. It is you who is overlooking the democratic principle – because any German government which wants to get reelected (and only then they can “lead”) will have to consider the opinion of the electorate… and the opinion of the electorate is probably far more resistant to further payment than the government itself. Not the least, however, Germany is not the only country that’s contributing money, and in all of them, the electorate raises the same questions: Why should they allow their taxes to make lifestyles or amenities sustainable for some people in Greece that they do not enjoy themselves? Your lambasting German elites is a strawman. It’s not elites that are your problem. You only have to look at the last elections in Finland, which on a per-capita basis is also a strong contributer to EU funds and is a contributor to bailout funds, that you’re simply dodging to stand responsible to the taxpayers of those countries keeping Greece going. Responsibility is precisely the question you dodge, as all you talk about is others giving money, not said money actually being used responsibly.

  21. Christos Mouzeviris

    Dear Oliver, you are good with figures, I will give you that. Unfortunately not with facts. I did not compare Ireland and Greece, yes I agree they are not the same. The reasons for their troubles are different. But the result the same. They both have to pay for others.

    As for Greece, read the article below to understand. The EU and the eurozone in their current forms only benefit the rich countries of EU, notably Germany. They gain more than the poorer ones, that is why they contribute more. Try to explain that to the ordinary German, which in fact is as much deluded and lied upon by Germany’s governing elites as any other European.

    “Just to examine where the eurozone is flawed, when we have two countries- Germany and Greece for example- engage in free trade, the country with the slower rate of productivity growth normally experiences a depreciation of its currency. But currency depreciation need not occur. There are other possibilities: its workers’ wage rates could grow at a commensurately slower rate; it could experience ever-increasing unemployment; its workers could emigrate; or it could find some means of “validating” its increasingly over-valued real exchange rate. Greece chose the last of these options. And the means it chose to validate that was to increase government spending, financed by borrowing.

    Over the last decade, unit labor costs in Greece have grown by about 30% more than in Germany. This implies a 30% effective appreciation of Greece’s real exchange rate. The validation of a real appreciation of that magnitude has required a lot of government spending and such a fiscal stance was bound to prove unsustainable. Greece is not the only European country in this pickle. Whether the Greek and European body politic can now weather the fiscal burdens of an adjustment without breaking the euro currency system, remains to be seen. (Written by Mr Peter Drysdale, Emeritus Professor. For CES).”

    So you see how it works now. The richer countries are gaining more, and they use smaller countries and their resources to balance their sheets. But when it comes the time to pay they are all going “Dutch”. Literally. We shaw the Dutch government nearly crumbling when austerity knocked their door, something that they supported fully for others.

    And Greece’s expenditure is mainly wasted in its defence and weaponry that it buys…guess from where? GERMANY, France and the USA. So while the Germans are giving us money to “save us” they are keep making sure we buy their tanks and submarines to protect ourselves from where? The Turks, a NATO ally of ours. While the EU and Europe could easily form a common defense policy to protect the borders of Greece and all the outer borders of the EU.. But why they would do that. Who would buy their weapons then, if they were not making corrupt dealings with the corrupt Greek governing elite? Have you heard about a former Greek minister, Mr Akis Tsochatzopoulos that went to jail recently because he was ordering submarines from GERMANY and the US that we did not really need?

    Or did you ever hear about the SIEMENS scandal? Google it and find out how Germany again stripped Greece out of money with corrupt dealings under the table between the two governing elites.. They do not tell you those things in Deutschland, do they?

    And it is Germany again who opposes the eurobonds, a more viable solution to save the euro, and they just want to impose the new Fiscal Treaty on others. Now partly I agree with the Treaty, as it is good to control how much does a country borrow or spend. But as with the former existing Treaties, it was actually Germany and France who broke the rules first so how dare they point the finger to others. Who is going to control Germany when it breaks first this treaty too?

    The solution would be, if you want to keep the euro to have a full fiscal union, but that is what Germany opposes too.. Why would they accept it anyway, as it will harm its interests and it will mean that it will start to share with other countries. Giving them bail outs with high interest is much more profitable for them you see, than actually allowing them to have industries and the same economy with them. Interests have to be repaid. While who is going to buy your stuff when they actually produce their own?

    Germany acts for its own interests first..Fair enough.. But please stop pointing the finger to others and slander them to make it righteous.. You did the same with the Jews in the past. Tell the truth to your people and stop pretend that you act in the EU and the eurozone in any other way than of this to promote your interests only to the detriment of poorer countries in Europe and outside of it..

    Now go and read and copy some more figures from the books to come and reply.. Figures do not tell the truth.. They just cover it. How come the debt of some countries are much higher of that of Greece and Ireland, yet they are not attacked by the markets? Because of the weaknesses of the eurozone and those in their economies.. But when we are trying to fix those weaknesses in the eurozone it is always Germany, Holland and other rich countries who try to block or twist them…

  22. catherine benning

    Hollande is another point of view, and the French people decided he was the point of view they felt represented them at this time.

    And another point of view is always a good thing to have and listen to. So lets ask a few questions.

    Has auterity worked for the Greek people?. Or come to that, the American people? Or has it simply caused the kind of chaos Europe thought it would never experience again? What has austerity achieved for us so far?

    We read yesterday in our British newspapers that the Greek people are suffering so badly, some are having to give away their children for fear they will not be able to feed them. How has this been allowed to reach such a level. Can you imagine the horror it would be to live through that scenario?

    http://www.bbc.co.uk/news/magazine-16472310

    And yet, we hear our politicians say out loud, ‘we will not give another penny to Greece, they are undeserving.’ Whilst they continue to send billions of pounds sterling or Euro’s, belonging to our European tax payers, which they call aid, to countries outside the EU who do not need it and abuse it. How can this be right or worthy of the Euopean thinking? It is a disgrace. The Greek people are Europeans and they are the heart of all that is European democracy. In fact, they are ‘our people’ and deserving of all we have to give ouselves.

    No, this is the thninking and action of big business. These nasty thinking organisations that took the public funds when they robbed us with their financial gambles, as they played the greed game. They are the people who put Greece in this harrowing position, and they are the voice of austerity.

    Do any of you see those at the top suffering austerity? Do they pay their full and proper tax? Or, do they use get out clauses paid so highly to their accountants to free them from it?

    Hollande may yet turn out to be the saviour we hope to find. He may lead the way to the deliverance of us all. And if he doesn’t, then we all have to look for a different set of rules to those we have been offered to date. An entirely new system must be on the cards if we are to rid oursleves of this rampant capitalist greed that brought this devastation to us all. And where did that all begin? Anyone care to voice it?

    However, he should marry his women and not abuse them for his own ends. His fear of commitment is something we should all be afraid of.

  23. Christos Mouzeviris

    No Catherine… Austerity hasn’t worked in Greece at all.. It only put the Greek people in a terrible position, only to repay the rich fat cats of this world… Nothing good came out of it, so far.. Austerity would be good if it was combined with investments too, cut the salaries but invest in creating jobs.. So far only the first has happened and it is disastrous for the Greek people.. In a country where suicides was a rare phenomenon, now it is common.. The nation’s pride and confidence is at the lowest point and we are being treated like the Jews were before WW2…There are many reports among the Greek diaspora, especially in countries that “give their taxes to the corrupt and lazy Greeks,” notably Germany, Austria, Finland and Holland, of discrimination and abuse of the Greek expatriots, simply because they are Greek… Not a great example of European solidarity is it? It is a shameful act and those responsible are the European elites who allowed this to happen. They are using the Greeks as a scapegoat for their failures… “Time has twists and turns” as a Greek saying is telling us, and let them be warned about their actions and the results that these will have in Europe….

    • catherine benning

      Yes, Christos, you are right. i agree with you. Of course, it is what I wrote above yours.

      We read of this terrible event in our papers yesterday and it is so appalling I cannot imagiine where the heart of our leaders has gone.

      The answer has to be put Europe right before we go to war to save others, or, before we send aid outside our borders when we don’t have enough for our own people within. Britian is sending billions of pounds of aid to countries who, like India, spend it on nuclear warheads and rockets to the moon, or, filling their leaders pockets with our taxes to buy themselves private planes. They deny we have starvation and abuse right here inside this afluent places called Europe.

      http://www.bbc.co.uk/news/magazine-16472310

      Vive Hollande – Vive le France.

      We need a change of thinking fast.

    • Ana-Maria Anghelescu

      I can tell you that austerity didn’t work at all in Romania also. Why? Let’s think! Almost the third part of youngsters are unemployed, without any chance of being employed soon. What is to be done?

      As I saw above, the situation is not unique in EU! I’m afraid my Romania is going fast to the ‘Greek slope’. I don’t mean any harm with this sentence, but this is the truth. I know how it feels to be discriminated in other countries just because you have a certain nationality.

      So, why is Romania going to the ‘Greek slope’? Because, at a point, the financial aid from IMF will stop or the terms of ‘earning’ some more money will be more and more difficult to attain. And there will be the collapse! We will not be able to pay the salaries. Then, the people won’t be able to pay the taxes. It will lead to a ‘vicious circle’.

      Indeed, Francois Hollande is regarded as a savior of Europe, but I’m afraid we are letting this cliche to take over us. Why we tend to see every new politic figure as a saint? As the perfect chance of regaining confidence? I may seem pessimistic, but I think this is not only my opinion. I must be realistic! Hollande is just another politician, who’s going to fulfill just a part of his promises. He can’t go alone for a change of perspective in Eurozone, because there he’s not alone. And Germany, represented here by Merkel, seem not to be satisfied with this election and with the socialist plan.

  24. Christos Mouzeviris

    Vive Hollande… Well at least until we see what he is able to do… Some saw a Messiah in Obama’s face… Little has changed really in USA after Obama.. So until I see actions, I will keep all my options open…. ;o)

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