The pendulum doesn’t normally swing this fast.
In a matter of a few short months, Europe has swung from a continent burdened by debt and consumed by the idea of austerity as a means of sharply reducing the cost of government to a continent sill laden by debt but now consumed by growth.
Voters on Sunday made clear in elections in France, Greece and Germany that they’ve had enough austerity. No more layoffs, no more pay cuts, no more scaled-back benefits.
Instead, the French voters who threw out incumbent President Nicolas Sarkozy in favor of Socialist Francoise Hollande and the Greek and German voters who supported anti-austerity parties in national and local elections are seeking something far more nebulous than mandated budget cuts: sustainable economic growth.
“The problem is, while we are now looking at ‘growth’ as a solution, that’s highly likely to disappoint,” said Peter Tchir, a founder of TF Market Advisors in Connecticut.
Tchir said austerity measures drafted and approved in recent months for debt-addled European nations, usually as part of a bailout agreement with the International Monetary Fund, the European Union and the European Central Bank, “attempted to be good for the economy.”
Tchir is skeptical that shifting that strategy 180 degrees virtually overnight will benefit Europe or global markets.
“There are no magic bullets,” he said. “Growth will fail and we are back to having too much debt.”
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