Sunday’s elections in Europe occurred in three countries with diverse economic circumstances (France, Germany, and Greece); and they were for different parts of government (presidential, regional, and parliamentary respectively). Yet the common message from the electorate is undeniable, reminiscent of a famous line in the 1976 movie Network: “I’m as mad as hell, and I’m not going to take this anymore!”
Much will be written about these elections, and rightly so as they could well mark a further evolution in Europe’s regional integration efforts. They unambiguously show that the electorate is angry and has lost confidence in the ability of traditional politicians to solve the region’s crisis. Indeed, many citizens are yearning for alternatives but, as yet, are not coalescing around a common view of what these should be. As a result, political realities will complicate even more what is an already delicate economic and financial outlook for Europe, the world’s largest economic area.
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What scares me in addition to the huge government spending increases the socialists will propose are the new taxes, especially the financial transaction tax. Not sure how that would play out on our side. Obama has expressed solidarity with and a desire to parallel the socialists’ efforts to punish financial market participants, but he appears to have distanced himself from the transaction tax. Too many Wall Street contributors to his party to let that through, I guess.
Overall I think this is just horrible news. Unless we can really cut clear of EU on our own, things seem pretty grim to me.