Just hours after it became clear that the parties that have ruled Greece for years were largely repudiated for their supports of austerity, Nicolas Sarkozy, who supported austerity measures in France has been voted out of office by supporters of François Hollande.
The anti-austerity movement has swept over two of the most visible national participants in the war between expenses cuts and stimulus. Greece has been forced to cut government expenses by such a large amount that many voters believe their economic prospects could be doomed for years. Sarkozy expense cuts, meant to keep France’s borrowing costs low, have clearly been rejected at the pools. The two pieces of news, coming in one day, will undermine capital market support for bonds in nations which have taken, or may need bailouts
Sarkozy also supported, or rather did not oppose, the strong-arming of Europe by German leader Angela Merkel. Because of Germany’s role as the powerful holder of purse strings in the region, it has been able to pressure nations to cut costs instead of investing in stimulus. A number of economists believe this is wrong-headed and has begun to push unemployment higher and make long recession more likely.
According to the Wall Street Journal,
French Socialist candidate François Hollande won Sunday’s presidential runoff, defeating incumbent Nicolas Sarkozy after a hard-fought campaign that pitted two radically different personalities against each other, according to estimates of preliminary results