French, Greek voters send message to Germany [View all]
SAN FRANCISCO (MarketWatch) — Sunday’s elections in France and Greece contain many lessons for Europe’s leaders. Perhaps most prominent among them is that the push by Germany to solve the European debt crisis primarily by imposing harsh and unrelenting austerity on heavily indebted euro-zone countries was a serious miscalculation whose unintended consequences are still unfolding.
On Sunday, French President Nicolas Sarkozy joined a lengthening list of leaders in Europe who have been voted out of office as a direct result of popular dissatisfaction with austerity focused policy responses to the debt crisis. Greek voters, furious about austerity, elected a parliament that may struggle to form a government, let alone pass further austerity measures in time to meet looming deadlines.
As obvious as the lesson may seem, it’s fair to ask whether Merkel and Germany’s other leaders, along with the rest of Europe’s political class, will learn it. Because it isn’t the first time that Germany’s obsession with economic rigor has backfired for the euro zone.
Back in 1997, around the time Europe was setting terms for the creation of the euro, Germany threw some sand in the gears of EU machinery by demanding that all the countries that wanted to join new currency sign a “Stability Pact.” ................(more)