European Debt Crisis

The political pushbacks on European austerity measures

Kai Ryssdal May 7, 2012
European Debt Crisis

The political pushbacks on European austerity measures

Kai Ryssdal May 7, 2012

Kai Ryssdal: The never-ending fiscal drama that is the European Union has once again not disappointed. The two countries that are arguably either at or really, really close to the economic center of the European debt crisis had elections over the weekend.

Socialist Francois Hollande will be sworn in on May 15th — he won on a distinctly anti-austerity program. Greek voters, meanwhile, punished the two biggest political parties for the belt-tightening that German Chancellor Angela Merkel has been demanding.

We’re going to hopscotch around Europe for a little analysis right now. Franz Olivier Giesbert is the editor of the French weekly news magazine, Le Point. I asked him when we spoke this morning whether French voters might be in a little bit of denial about their economic reality.

Franz Olivier Giesbert: They are in kind of denial, but they are very afraid, so they know that it’s going to be less easy than it was. They know that.

Ryssdal: Does this election of Mr. Hollande and his eventual cabinet and ministers, does it make or less likely that this thing that we over here call the European debt crisis will come to some kind of satisfactory conclusion, do you think?

Giesbert: It’s very difficult to say because when you see the program of Mr. Hollande, it’s not dedicated to this problem in the country. But Mr. Hollande is very smart, very pragmatic. If his program is not dedicated to the debt crisis, I think himself will be dedicated to the debt crisis.

Ryssdal: There was much talk during this election of the “Merkozy” alliance — Angela Merkel and Mr. Sarkozy.

Giesbert: Yeah, that’s right.

Ryssdal: Will there be a “MerkHollande”? He’s going to see — the new president — he’s going to see the German chancellor in a couple of weeks.

Giesbert: Yes, yes. And I’m sure in some weeks — I wouldn’t say some days, of course — in some weeks, things are going to get better because it was always the case between the German chancellor and the French president, and at the end, they were the best friends.

Franz Olivier Giesbert at the French news magazine Le Point.

Down in Athens, Greece, Antonis Papayiannidis publishes a magazine called Economic Monthly.

Antonis Papayiannidis: People are running scared because they voted with their hearts and not with their minds, and now they have to collect.

Ryssdal: What’s supposed to happen then? Do you think the Germans are actually going to look at Greece now and say, ‘Oh yeah, we’ll keep on funding whatever bailout programs we have in place’? Or are they going to say, ‘The heck with you guys, if you’re going to do this’?

Papayiannidis: I believe that B would be correct. I mean, Germans will more or less point the finger at us and say, ‘You’ve been missing your targets, so you either get out of the euro or you die locally.’ Greeks have voted for the easy way out, meaning they have been venting anger at their political leaders. And now we have total impasse, meaning we go nowhere.

Ryssdal: It has to go somewhere sir, though, right? Because the debt is real, the probability of a default is now real again, the question of leaving the euro is real again. It has to go somewhere?

Papayiannidis: Yes. But the saving of Greece on the part of Europe has been really a way to pretend that the problem would go away, while the Europeans — meaning the Germans — will be ringfencing Greece to make the country ready to collapse. And this may be happening just before our eyes.

Antonis Papayiannidis in Athens.

Josef Joffe is the editor of the German newspaper Die Zeit.

Josef Joffe: The bet part has been that the Germans will finally cave in and stop cracking the whip of austerity, but I don’t think so, because who else could come up with the kind of money? The French, no. The Italians, no. The Spaniards, no. So if there’s only one left, even the rich Germans don’t have bottomless pockets.

Ryssdal: I wonder though if this won’t somehow become a problem politically for Mrs. Merkel, because her voters, her electorate, will see people in Greece and France not following the austerity course and what’s to the prevent the average German citizen from saying, ‘Well we’re not going to keep giving these guys money and giving them bailouts — how are we going to do that?’

Joffe: First of all, Mrs. Merkel is not facing any election; the next one is next year. And the Germans are the only country — only large country — who are doing pretty well. Their unemployment is falling rather than rising, and the deficit is coming down to almost zero over the next year or so.

Ryssdal: What do you make of the entente that had existed between Mrs. Merkel and President Sarkozy, now with Mr. Hollande?

Joffe: There is no Europe without Germany and France. Now the question is: Who’s going to adapt to whom?

Josef Joffe of the German newspaper Die Zeit.

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