The tide is turning across Europe - is this the end of austerity?

[breadandbutterfly]

Hollande has won, change is afoot in Grece, Labour has wiped the floor with the Tories.

Is this the end of austerity? Can Germany/the bankers really keep demanding the dominance of the 1% in the face of the electoral might of the 99%? The 1% can cook the books al they like between elections - but the problem with democracy is that even when you strike up deals with the media magnates - or they are the same person, as with Berlusconi - sometimes those pesky plebs just won't vote the way they're told.

Now, the markets could bring down Greece. But France is another matter. The markets don't really wish to bring down all of Europe, surely, or where will they live in their nice penthouses and chateaux? Obviously, they are not bothered about what happens in Greece, far away from their backyard. But France?

We live in changing times.

Any thoughts?

Hopefully the end of more austerity for those who have always had fairly austere lives, and the start of paying a fairer share for those who've enjoyed more privileged lives. Must admit to smiling when I read the news that Hollande had beaten Sarko.

Quite - not been many good news days recently, but this was certainly one of them.

Bravo to the French! Always did have the courage to chuck out their rubbish leaders properly. :)

Nice to see that Hollande is planning proper left-wing policies that would have Murdoch frothing at the mouth -

"The socialist candidate has promised to raise taxes on big corporations and people earning more than 1m euros a year.

He wants to raise the minimum wage, hire 60,000 more teachers and lower the retirement age from 62 to 60 for some workers. "

It's enough to make you move to France...

Exactly what is "a fairer share"? How high do you think you can raise taxes? Does it not occur to you that the rich have always paid the vast majority of taxation? Hollande is making promises he can't keep, and it will all end in tears, and once again, those on the left will explain it away as "not really being socialism" as they always do when it all goes wrong.

OP is shockingly ignorant about France (and I suspect, macroeconomy).

What French media told French people was to vote for Hollande. They got what they wanted. What are you talking about?

The real problem with democracy is that most people are dumb enough to vote the other way to punish the incumbent without considering if the idiot they elected knows anything at all about the economy.

Have you people read anything Hollande has been saying? You wouldn't be celebrating if you knew.

I have been watching France because I think it might act as a barometer for what is to come. So pleased Hollande has won. Now we wait to see what happens in Greece.

Cote D'Azur - clearly I am not as knowledgeable as you. But then few are, I'm sure.

I think my grasp of macroeconomic policy is just fine, thank you. I just happen to draw different conclusions from you.

josephine - I don't know - what is a 'fairer share'? I give up. I didn't mention any such thing.

What "conclusions" have you drawn, then?

That French media had been telling voters to elect Sarkozy? Wrong.

That Hollande's election will mean "the end of austerity"? Wrong again.

That "markets" wish to bring down at least some European countries? Not only wrong but complete misunderstanding of what "markets" are comprised of.

That Germany has been "demanding the dominance of the 1%"? What on earth are you talking about?

Sorry, but if you think that political & economic commentary is a democratic place where every voice is equal in merit a la "I just have different conclusions", you are wrong. Again.

'End of austerity' probably means end of the euro as we know it, and a disorderly exit at that. If OP is hoping for another Lehmans Brothers, she is looking in the right direction.

I think it will be an interesting experiment to see what happens when you attempt to spend your way out of a debt crisis, and I am glad that we in UK are not standing too close to it (though Euro failing will lash all of us).

Cameron's "non" is now utterly irrelevant; but the unclear result in Greece may prove concerning.

blueshoes - you may well be right re end of Euro, though I view that with more equanimity than you.

Cote - have just read some of your v biased views over on the other thread - actually, until proven otherwise, you seem unaware that predictions about the future course of events do have equal merit. Clearly, if you are proved right in the fullness of time, then you are wise woman indeed.

At the moment, you're just a rather rude one.

Edith - the US has had rather more success with their attempts at rather gentler versions of austerity than we have had with our vicious attempts. The Labour govts last moves to support the economy rather than squash it led to renewed growth until the current government stopped that with heavy austerity measures.

It seems common sense that allowing ordinary people to spend will allow the economy to get back on its feet. The 'paradox of thrift' is not really that paradoxical.

How do you "allow ordinary people to spend" while still trying to get the deficit reduced?

I worry less about the deficit in the short term than you do - once the money is going round, being spent, the economy is booming, then higher tax receipts will pay of the deficit easily.

The only reason people panic about paying off all the edficit NOW is because the markets tell them to.

But I think the markets need to be controlled, not the sovereign nations. I think 'the markets' are fallible and a sham. I don't think that everyone sitting on French bonds say actually will want to sell them once Hollande is elected - or maybe if it was France in solation, but if there are left-wing govts across Europe? what then/ If austerity is rolled back, where are they going to put their money then?

i think they can frighten a little nation like Greece but France is a much harder nut to crack.Because she will bring the est of Europe with her - because the entente between Germany and France holding Europe together is no more.

"blueshoes - you may well be right re end of Euro, though I view that with more equanimity than you."

I guess ignorance is bliss. Sorry, but I share Cote's view of your naivete. Your trying to rationalise how 'markets' will behave is quite jarring.

Do I think the end of the euro would be nice in the short term? No. Do I think austerity is nice in the short or long term? No and no again.

I think you are astonishingly naive if you be;ieve everthing your masters are telling you about the 'necessity' of removin every penny of the deficit now, about the dreadful fate which awaits any nation that dares to strike out on its own and stick two fingers up to the markets.

Look at Iceland. Doing very nicely thank ou. Rather Iceland than Greece.

Iceland isn't in the EU. Greece is. So is France.

No country can live beyond its means forever. Regardless of what its people vote for. It's one thing for Hollande to have policies of massive public spending, it's another thing for him actually to be able to raise the funds to be able to do this.

Bread: "But I think the markets need to be controlled, not the sovereign nations. I think 'the markets' are fallible and a sham. I don't think that everyone sitting on French bonds say actually will want to sell them once Hollande is elected".

That is not exactly how it works. The bond 'markets' have probably already been priced for a Hollande victory. No one in the 'markets' is trying to pull the wool over your eyes. You cannot 'control' markets. What is this 'market' anyway??

Iceland did not have to contend with exiting their currency with massive currency devaluation and capital flight. It is misconceived to compare with Greece.

You tell me, blushoes, with your superior wisdom. What are the markets?

And what do you fear so much about a left-wing sweep across Europe?

Josephine - yes, France is in the euro. But she is rather more than that. Along with Germany, she dominates the euro. If France falls so does the euro. So where will all the capital fly to? The argument re Greece is that she is just a liitle country, not self-sufficient - she couldn't cope on her own. Europe could cope quite well thank you, if all of the ex-Euro countries decide to,morrow to trade with each other via their own currencies rather than via the euro. Lots of speculators would lose out, sure. But France would be fine.

Bit of sorting out at the start, sure, whilst the new (old?) currencies jostle for relative value. But then business as usual. You make it sound, blueshoes, as though Europe had never experienced separate currencies before!

Bread, each nation within the EU does not exist in isolation. Their economies are inextricably intertwined. France cannot go into protectionist mode without severe knock-on effects on the rest of Europe. Greece cannot default or change currency without hitting its creditors (other sovereign nations and investors - which includes France as well as the banks you put your hard earned cash with) hard.

That Greece will default is probably a foregone conclusion - it is a matter of time. The best we can hope for is an orderly exit by Greece from the euro, without contagion hitting the larger EU countries like Spain, Italy, Portugal or god forbid, France.

The risk of a left wing surge with a muppet in charge of France is that this exit becomes uncontrolled and thus infects the rest of the Europe. But of course, the UK will be shielded from all this

Bread, you are breathtaking in your ignorance.

Of course Europe has had separate currencies. What it has not ever done is disentangle itself from a common currency. 'A bit of sorting out at the start' - That must just be the easy bit

It is not just 'speculators' that get stung It is the sovereigns and institutions that hold the debt of the defaulting country, and those that in turn do business with those sovereigns/institutions and so on. With London being a financial centre, there is no hope that the euro imploding is not going to have serious ramifications on our shores - our pensions, our banks, our corporations.