France's parliamentary elections also produced a major development, giving President François Hollande's Socialist Party a solid majority, allowing them to form a majority government with no coalition partners. (France's Socialist Party wins runoff, reports say Deutsche Welle English 17.06.2012)
Paul Krugman lays out the rationale for why Syriza may decline to join a Greek governing coalition in And Then What? 06/17/2012. A Greek exit from the eurozone being all but inevitable under any Greek government, why should Syriza sign up to take the blame for the economic disruptions that will follow in the immediate aftermath? If they let ND and Pasok preside over the failure to which their policies have acquiesced by their subservience to the demands of German Chancellor Angela Merkel, Syriza would then be positioned to pick up the pieces politically in the next national elections.
The Greek situation is one piece of the immediate crisis, along with Spain's banking problems and Italy's stalling economy.
But the main immediate political confrontation still looks to be that between Hollande's France and Angie's Germany, focusing on the fiscal suicide pact that Angie is insisting that all EU countries adopt. It would effectively outlaw necessary economic stimulus policies in recessions and depressions. It's just insane for European countries to be writing such a thing into their constitutions. And it shows how badly European leadership has failed in this depression. Angie is leading culprit, but France's former President Nicolas Sarkozy and Britain's David Cameron bear nearly as much responsibility.
A columnist in the Süddeutsche Zeitung adopts a Pollyanna view of the outcome of Greece's election, :
Der größte anzunehmende Unfall ist ausgeblieben. Die Griechen wollen Europäer bleiben. Syriza, die linksradikale Partei, der die Griechen in den letzten Wochen zugeströmt sind, hat zwar noch einmal zugelegt - aber sie hat nicht gewonnen. Gewiss, die Griechen haben die alten Parteien erneut abgestraft, die sie in ihr gegenwärtiges Elend geführt haben. Aber mit Maßen. Denn auch wenn die Wut über die jahrzehntelange Misswirtschaft von Konservativen wie Sozialdemokraten gleichermaßen gewaltig ist, so wollen die Griechen doch in Europa und im Euro bleiben.
[The greatest of all foreseeable accidents didn't happen. The Greeks want to remain Europeans. Syriza, the Radical Left Party, to which the Greeks streamed in recent weeks has certainly increased its vote - but it didn't win. Yes, the Greeks have again punished the3 old parties that led them into the current distress. But in measure. Then even if the fury over the decades-long economic mismanagement of the conservatives as well as the social democrats is still as great, the Greeks still want to stay in Europe and the eurozone.]
In other words, we're going to continue with the same austerity policies that have been failing spectacularly and leading to crisis after crisis: so everything's going to be fine!
Awesome, just awesome.
Tags: angela merkel, austerity economics, eu, euro, european union, france, françois hollande, greece