News for today's 2018

EUROPE

<br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFl7RQD1dtzuOHl2eM7llR1q_3ObVV9_E-gwfGJvbVf0WTl9uJWpEQSyfZ8SBoLCnuI7aZzyHUhKbAurGZptxGbX0L1CeXj607DfY68BVq9eCvkpWGXkaxWMlQiStxa-NHndNUj8jqresE/s1600/5141-european-union-flag.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFl7RQD1dtzuOHl2eM7llR1q_3ObVV9_E-gwfGJvbVf0WTl9uJWpEQSyfZ8SBoLCnuI7aZzyHUhKbAurGZptxGbX0L1CeXj607DfY68BVq9eCvkpWGXkaxWMlQiStxa-NHndNUj8jqresE/s320/5141-european-union-flag.jpg" width="320" /></a></div><div class="MsoNormal" style="color: blue; line-height: normal;"><br /></div><div class="MsoNormal" style="color: blue; line-height: normal; text-align: center;"><b><span style="font-family: "Times New Roman","serif"; font-size: 24pt;">EUROPE TURNS ON ITS LEADERS</span></b></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="font-size: large;">I</span><span style="font-size: large;">t was a bitter weekend for Europe. In elections across the continent, voters expressed displeasure with their political leaders. The results were no surprise and reflected deep concern about economic policy and, especially, the impact of the austerity measures that have been adopted to fight off insolvency.</span></span></div><table align="right" border="0" cellpadding="0" class="MsoNormalTable" style="width: 250px;"> <tbody><tr>  <td style="padding: 0.75pt;"><span style="font-size: large;"><br /></span></td> </tr></tbody></table><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">While tough choices are necessary, they are unsustainable if they do not enjoy public support. The only question now is how deep the disaffection goes: If voters do not believe that their political system is fair, then the results are likely to shape not just the composition of European governments but their very structure.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">The highest-profile election last weekend was the second round of the French presidential ballot, in which Socialist Francois Hollande upset incumbent Nicolas Sarkozy. Mr. Hollande will be the first Socialist to occupy the Elysee Palace since Francois Mitterrand's 14-year presidency that ended in 1995. The election was not really close: Mr. Hollande claimed a victory margin of 51.9 percent to 48.1 percent. Mr. Sarkozy conceded defeat 20 minutes after the last poll closed.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">The real determinant of the vote was the economy. Unemployment in France tops 10 percent, its highest level in over a decade. Growth is anemic, the trade deficit is growing and the public responded to Mr. Hollande's call to raise taxes on the rich and increase government spending to create more jobs. That posed a stark contrast with the austerity that Mr. Sarkozy backed in tandem with German Chancellor Angela Merkel.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">Greek voters are equally disgusted with their leadership and they showed their contempt in a parliamentary ballot also held last weekend. In that election, New Democracy and PASOK, the two parties that supported the bailouts by the European Union and the International Monetary Fund, were hammered, picking up less than 40 percent of the vote between them. They held a strong majority in the previous parliament.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">By Monday evening, the New Democracy party leadership announced that it was unable to put together a coalition government. Being the largest single party in the legislature with 18 percent of the votes, it had the first opportunity to forge a government. Failing that, the task falls to the leftist Syriza party, which came in second in the vote, and which opposes many of the key planks of the bailout plan. It is reaching out to other parties on the left that share its view on the bailout package.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">The rejection of the two mainstream parties and the rise of the fringe on the left and right is as stark a repudiation of the political status quo as can be imagined. Unemployment in Greece is near 22 percent and more layoffs are sure to follow as the EU/IMF austerity package continues to bite.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">The problem for the next government in Athens, no matter who leads, is that the country soon needs the next tranche of loans from the IMF and the EU stability fund. But there must be another €11 billion in spending cuts. Failing that, the country is bankrupt.</span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">And while the prospect of a sovereign default or the Greek departure from the euro is worrisome, more disturbing still is contagion to other European economies like Spain or Italy.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">While France and Greece seized the headlines, the anti-austerity mood is spreading. In council elections in Britain held last week, the conservatives were drubbed by Labor. With more than 4,700 seats at stake, Labor gained 823 councilors, the conservatives lost 405 and Lib Dems lost 336.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">Conservative politicians dismissed the results as ordinary for midterm elections, a more accurate assessment suggests that it is anger and dismay at government policies that have plunged the country back into recession.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">A similar outlook was evident in Italy's local elections, also held on Sunday. In those ballots, center-left and fringe parties also scored gains at the expense of the mainstream parties. With unemployment nearing 10 percent, the full scale of voter unease will be apparent in the second round of voting later this month.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">The final piece of evidence are elections in the northern German state of Schleswig-Holstein. There, the ruling Christian Democratic Union won 30.8 percent, its lowest share since 1950. Its coalition partner, the Free Democratic Party, fell to 8.2 percent, about half its turnout in the last ballot. Social Democrats won 30.4 percent; working with its traditional Green Party ally, which came third with 13.2 percent of votes cast, and other left parties, they are likely to form the state government.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">While this is a local election, the results show shrinking support for Chancellor Merkel, also of the CDU, and reduce her party's influence in the upper house of Parliament.</span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">Austerity is taking its toll, not just economically but politically too. Of the 17 governments that use the euro, 11 leaders have been forced from office since the financial crisis began in 2009. The Greek government is likely to return to the polls in a few weeks if a stable coalition cannot be created. France holds parliamentary elections next month.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">If the progressive surge continues, the complexion of French politics will be transformed with the Socialist Party holding the presidency, both houses of Parliament, nearly all regions and two-thirds of French towns.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">Mr. Hollande's first order of business will be meeting with Ms. Merkel to find common ground to forge a consensus among Europe's leading powers. Austerity must be softened and a path to renewed growth established.</span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Times New Roman","serif";">Rejecting leaders is one thing; the rise of extremist parties across Europe is another. Politicians must now worry whether voters have lost faith in political parties — or the political process.</span></span></div><div class="MsoNormal"><br /></div>

EUROPE

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