Interesting times ahead as both France and Greece give austerity a poke in the eye. Is this the end for Greece in the Euro? Is this France saying Au Revoir to the Euro by choice?
Is there an alternative to austerity? Is it all about spending your way out of a crisis and just printing more money?
Nope there is no real alternative to austerity. The bottom line is somebody is going to be at the shitty end of the stick.
The predictions for Greece if it drops out of the Euro aren't great, civil war, military junta's etc. Not so sure what will happen in France, but at least one of the ratings agencies has dropped the French sovereign debt rating down.
The fundamental problem seems to be that there is no 'lender of last resort' for the Euro. It is illegal for the ECB to undertake 'quantitative easing' (print money, buy bonds back and thereby decrease the yield on government debt) as happened here and in the US. This would exchange public sector debt for inflation.
Quantitative easing is a fancy term for what governments have been doing for years when faced with a deep hole in finances. As happens the 'hit' is then taken by the countries savers (usually pensioners) so the austerity just moves to a different group.
I would guess it can only really end one of two ways, either the Eurozone allows QE by the ECB, or countries will drop out of the Euro. The election results tend to suggest the other alternative reducing government spending is unacceptable to at least Greece and France.
It's interesting now to see world leaders cosying up to François Hollande in order to persuade him not to upset the apple cart.
DC, the British PM, particularly so considering that he effectively snubbed him when he visited London during the Presidential campaign and left it to "two 'eds are better than one" Miliband to provide him his morning coffee and croissant. Now, he's all over him like a cheap suit as his worst fears may be about to be realised - that there may after all be something in what the Labour party have been saying about austerity measures being counter-productive.
The emergence of Mme Marine Le Pen slagging off both Sarkozy and Hollande both before the run off and moments after Hollande was declared the President Elect is interesting and serves to support the view that the extreme right (as in Greece) are gaining ground and the centre right are losing it.
One of Hollande's stated policy decisions will be to remove French troops from Afghanistan this year (hence the early invitation to visit the White House and Camp David later in the year). Obama is himself a socialist President (in all but name) and fears that the USA will be left holding the baby. Well, too right that it should; it caused most of the world order problems anyway!
If Hollande pulls it off, he could probably fund one of his other pledges - to increase the number of teachers across France without resorting to increased lending.
Mme Aubrey, the leader of his party PS, is likely to be appointed Prime Minister and she is of course the daughter of the architect of the Euro, Jacques Delors. Whilst a significant number of les français prefer a return to the Franc as a currency, it is extremely unlikely to happen under Hollande's stewardship of the Élysée Palace and with Aubrey occupying the Hôtel Matignon and after 17 years in the wilderness and Mme Le Pen snapping at his heels, he will be wanting to buck the right wing prophesy that you can't spend your way out of a crisis. He will want to do it by screwing the Yanks and making significant savings on military interventions.
This time, it could possibly be Hollande who has his fingers clutching DC's wallet, not the other way round following the UK/Franco accord signed by Sarkozy.
Watch this space...
seems to a Brit abroad that the Poles are the only ones who work in the UK :grin:
austerity for whom ? there is no austerity for bankers. no austerity for c.e.o.'s, no austerity for m.p.'s no austerity for royalty ? no alternative ? yes there is. you who created the problem, keep the phucker instead of passing it on to us. you who made bad bets keep the returns or lack of and you suffer austerity. the losses of banks and financial institutions have been passed on to us the taxpayers worldwide by salivating excuses for elected representatives of the people. you've got money for wars to annex and steal killing hundreds of thousands but none for bread.
repudiate the debt, it was created by fraud !
i'm paying more in tax and i want it spending on services and infrastructure not wars of agression and annexation to steal natural resources and still charge me a litre for fuel ! i dont want to send western democracy (joke) and freedom to bomb foreign lands and end up in poverty.
The French may well be looking to the 'European Financial Stability Facility', which still seems to be a part of the ECB.....
Even german people joining in..and saying enough is enough !!!
France enters a new era tomorrow with François Hollande sworn in as the first socialist president for nearly two decades tomorrow.
German socialists just like supporters of the British Labour Party will be keeping a very close eye on how he faires on Wednesday when he meets Angela Merkal. Merkal will be squirming like a fish on a hook to hold on to the centre right austerity mantra but I somehow think that the rot is already set in. German's too want change and her position is in doubt in their forthcoming elections.
The GBP/EUR is reflecting the discontent in the money markets as Greece comes closer to leaving the Euro.
Well, well, well.
Alastair Darling confronts the Chancellor in the House today and gorgeous George freely admits that there must be growth with austerity. Quite a change on his previous language.
The PM in Manchester also sends the same message.
Could this possibly be something to do with the election of François Hollande?
France leading the revolution in Europe!
Vive la France!!
Vive le Président 7éme de la 5éme République Français!
I think the meaning of austerity has become somewhat clouded in the confusion of the times.
Lets reduce a country to a person.
Person suddenly realises he has spent what he has not got, is living beyond his means and is massively in debt - what to do?
Austerity means that he tightens his belt to spend less and work harder to bring more in (growth). Austerity = save money and work harder to bring money in.
Somehow the work harder bit has become lost in the confusion.
I would suggest watching The Great Euro Crash on catch up for those that didn't see it on BBC2 tonight at 9 pm.
Robert Peston gives a great insight into what went wrong and the stark choices facing the EC.
watching the program last night i think the thing that stuck in my mind was the fact that most countries falsified accounts to gain entry to the euro with the added fact that most of Europe's banks are trading insolvent ............looks for impending doom emoticon
:rotflmao::rotflmao:
. It would be lovely to declare the income of various bankers and MP's the 'proceeds of crime'. Then round them up, ideally with the retail rioters from last summer, and drop them on a small currently uninhabited island. They could then just get on with it outside the rest of society. 
