As expected, the socialist Francois Hollande has defeated Nicolas Sarkozy in France’s presidential election. Meanwhile, in Greece, and also as expected, exit polls for the country’s parliamentary elections are predicting chaos. The center-right New Democracy party has won about a fifth of the vote, with a hard-left coalition pushing the center-left Pasok into third place, while just to make things interesting, neo-Nazis have picked up around 7% of the vote and are set to enter parliament for the first time.
In short, these results represent a comprehensive rejection of the austerity-based plans to salvage the eurozone’s indebted economies, both in the impoverished south of the continent and the slightly-less-impoverished north. As I wrote two weeks ago, Hollande has pledged to renegotiate the European ‘Fiscal Compact’, which was designed to impose fiscal discipline on the continent’s governments and on which the ink is barely dry.
In Greece, the disparate parties must now to try to cobble together a coalition government. If they fail, there will be another election; if they succeed, it will be at the cost of concessions to the anti-austerity parties of the far left and right. The Greek people have so far insisted that they want to remain in the euro, while rejecting the austerity and reforms on which continued membership is conditional; something will soon have to give.
With Germany now almost alone in backing austerity as the solution to the eurozone’s problems, the break-up of the single currency – beloved of statists, social democrats (who would pass for socialists in the US) and bureaucrats – is a step closer this evening. The death throes could last for years, and will inflict great pain on millions of people. But for those who believe in small government, individual liberty and the pre-eminence of the nation state, while supporting economic co-operation between nations, there is some light at the end of the tunnel.
Europe’s high-tax, high-spending, mass immigration-fueled social democratic welfare racket wasn’t going to last forever. The eurozone project plastered over the cracks by transferring money from north to south, and the financial crisis that began in 2008 has merely brought forward the day of reckoning. It was always going to get worse before it could get better.
The tax hikes and cuts in spending that governments have imposed in a bid to keep the eurozone together have done little to tackle the underlying debt crisis, and nothing to produce the growth which is the the continent’s only hope of recovery. They’ve succeeded only in driving disillusioned electorates towards extremist parties. In Greece some of those extremists will soon be part of the government, while in France they’re waiting in the wings; Hollande relied on the support of Communist parties to defeat Sarkozy, who himself finished only narrowly ahead of the far-right National Front’s candidate in the first round of voting.
There will be all kinds of predictions in the next few days as to where Europe goes from here, but the truth is we’re in uncharted territory now. All we know for sure is that things are about to get interesting.