Austerity faces sharper debate after Europe polls

“Austerity need not be Europe’s fate,” Hollande declared after his victory was announced

Written by New York Times | Paris | Published: May 8, 2012 1:00:25 am


Hours after socialist François Hollande was elected as president of France,promising relief from austerity to address Europe’s financial crisis,Chancellor Angela Merkel of Germany on Monday pointedly insisted that neither she nor her government favored a renegotiation of a fiscal pact underpinning the continent’s belt-tightening.

Merkel’s remarks at a news conference in Berlin underscored both the abiding significance of the axis between France and Germany that drives European decision-making and the competing visions,sharpened by Hollande’s triumph,over how the financial crisis should be addressed.

The balance between reducing debt and addressing popular anger at austerity measures is proving complicated for Europeans,and Hollande has said that he intends to give “a new direction to Europe,” demanding that a European Union treaty limiting debt be expanded to include measures to stimulate economic growth.

On Monday,Merkel stepped up her efforts to avoid any appearance of a strained relationship with the new French leader after working so closely with his predecessor,Nicolas Sarkozy,that their collaboration became known as “Merkozy.” “I may say from my side that François Hollande will be welcomed with open arms here in Germany by me,” Merkel said.

But she insisted that the fiscal pact negotiated with Sarkozy and endorsed by 25 European Union member states was “not negotiable.”

Her remarks came in the wake of elections in France and Greece that punished leaders advocating austerity,leaving Europeans on Monday to contemplate a new and untested political landscape shaped by competing demands for austerity to counter the debt crisis and growth to avert further deprivation.

With final results of the French presidential election announced on Monday,the socialist Hollande had secured 51.62 percent of the runoff vote.

In broad terms,the French vote unsettled center-right governments across Europe,while their center-left adversaries felt emboldened,hoping that the triumph of one socialist leader presaged a wider resurgence.

But the nub of the ideological and fiscal contest lay in the continent’s traditional driving axis between Berlin and Paris,with Hollande promising to rewrite the austerity-driven pact struck between Sarkozy and Merkel.

“Austerity need not be Europe’s fate,” Hollande declared after his victory was announced.

The uncertainty about the future was compounded in Sunday’s elections in Greece that left the two political mainstays — New Democracy to the center-right and the socialist Pasok — with only about a third of the ballot between them as voters deserted them in favor of extreme parties to the left and right,according to almost complete results on Monday.

In televised remarks,the Greek Socialist leader,Evangelos Venizelos,said on Sunday night that Hollande’s victory would shift the balance in Europe.

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