North, South, East, and West: Austerity Revolt Felt Across Europe
Europe’s austerity backlash gains steam in challenge to German-driven program
A full 60 percent of French voters who turned out for the first round of presidential elections on Sunday -- whether on the right, the center-left, or the far left -- agreed on one thing: more austerity is not the direction they desire for France. Nicolas Sarkozy, the staunchly pro-austerity candidate and sitting president, received less than 27 percent of the vote, and if he loses the presidency in a run-off with Socialist Francois Hollande it will speak loudly about about the growing backlash against austerity taking place across the Eurozone.
All over Europe, where austerity policies have gripped ruling governments, a broad backlash is growing and as elections appear on the horizon for many incumbents public anger is becoming harder to ignore. (Image: STV) In the Netherlands over the weekend, the Dutch government cracked over disputes over proposed budget cuts. Meanwhile, deepening economic downturns in Spain and Italy are adding fuel to opposition against the German-driven campaign to remedy the crisis with massive cuts in government spending aimed at reducing deficits. Large austerity protests took place in the Czech Republic over the weekend, where tens of thousands marched in the streets in Prague calling for the end of austerity proposals and government corruption.
In the UK, a new report put out by the Scottish Trades Union Congress (STUC) shows dismal performance by the coalition government's economic austerity policies since it took office two years ago. The report showed growth forecasts have been continually revised down and the private sector has been unable to counterbalance the large-scale job losses in the public sector, according to STV in Scotland.
"Deflating your way to prosperity is a fool's errand. It depresses the real economy, and there is no reward from the speculators of the private money markets no matter how much austerity you pursue." --Robert Kuttner, Demos
And in Ireland, two of the nation's largest trade unions - Unite and engineering and electrical union TEEU - are urging their members to vote against the European fiscal compact treaty -- pushed by Angela Merkel in Germany, Sarkozy's France, and the ECB -- in an upcoming referendum. TEEU general secretary Eamon Devoy defended their position to the Irish Times, saying, "it is becoming increasingly obvious that austerity is not working.” And continued, “The right-wing agenda of Chancellor Merkel might make sense in Germany but it is a death sentence for our economy and people.”
Bloomberg reports this morning: "Together with anti-austerity rumblings in a campaign for elections in Greece, the shift in grass-roots sentiment at the heart of Europe generated fresh doubts about the German-driven strategy for getting to grips with the two-year-old crisis." And US economist Robert Kuttner writes, "Deflating your way to prosperity is a fool's errand. It depresses the real economy, and there is no reward from the speculators of the private money markets no matter how much austerity you pursue."
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(Illustration: John Shakespeare)
Bloomberg: Europe’s Austerity Backlash Gains Steam in Challenge to Merkel
Europe’s backlash against austerity gained momentum, in a challenge to German Chancellor Angela Merkel’s budget-cutting prescriptions for resolving the debt crisis.
French President Nicolas Sarkozy lost the first round of his re-election bid and a revolt against extra spending cuts in the traditionally budget-conscious Netherlands propelled Prime Minister Mark Rutte’s coalition toward an early breakup.
Together with anti-austerity rumblings in a campaign for elections in Greece, the shift in grass-roots sentiment at the heart of Europe generated fresh doubts about the German-driven strategy for getting to grips with the two-year-old crisis. [...]
The euro fell as bond investors moved money into Germany and out of the Netherlands, Belgium, Spain and Italy amid concern that a consensus over the crisis response is fraying. The yield on Germany’s five-year bond fell to a euro-era low of 0.62 percent while the premium that investors demand to hold Dutch bonds over bunds rose to the highest since 2009.
Together with anti-austerity rumblings in a campaign for elections in Greece, the shift in grass-roots sentiment at the heart of Europe generated fresh doubts about the German-driven strategy for getting to grips with the two-year-old crisis.
Political tensions coincided with a report of a greater- than-expected decline in services and factory output in April, equipping opponents of austerity with evidence that budget- cutting zeal may cast the 17-nation euro region into recession.
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Reuters: Dutch coalition offers to resign in budget cuts row
Dutch Prime Minister Mark Rutte tendered his government's resignation on Monday in a crisis over budget cuts, creating a political vacuum in a country which strongly backed an EU fiscal treaty and lectured Greece on getting its finances in order.
Rutte said he had offered his minority coalition's resignation to Queen Beatrix after a split with the populist Freedom Party, which had backed his government for the past 18 months, opening the way for elections possibly as early as June.
Turmoil in what is traditionally one of the euro zone's most stable and prosperous members jolted financial markets, already worried that the Socialist frontrunner in French elections has pledged to renegotiate the agreement to ensure fiscal stability if he wins the presidency next month.
Police clash with masked demonstrators in Athens on October 20, 2011 when tens of thousands of protesters rallied. Greece was the first and hardest hit by austerity, but certainly not the last.
Markets have punished Spain by pushing up its borrowing costs sharply after Madrid relaxed its targets for cutting the budget deficit.
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The Irish Times: Unions say 'No' to Euro Austerity Pact
Two of Ireland's largest trade unions - Unite and engineering and electrical union TEEU - have urged their members to vote No in the forthcoming referendum on the European fiscal compact treaty.
“The right-wing agenda of Chancellor Merkel might make sense in Germany but it is a death sentence for our economy and people.” --Eamon Devoy, TEEU
The TEEU has taken the decision because "it is becoming increasingly obvious that austerity is not working”, according to general secretary Eamon Devoy.
“The right-wing agenda of Chancellor Merkel might make sense in Germany but it is a death sentence for our economy and people,” he said.
“The backlash against austerity is no longer limited to small peripheral economies such as Greece and Ireland. The first round of the French elections shows that citizens in major, core economies of Europe are increasingly opposed to this policy.”
Mr Devoy said embedding the “draconian” treaty in the constitution “would condemn Irish working families to decades of financial servitude" to the banks. “To hold a referendum when France may well change its stance makes no sense whatsoever. If the Irish Government cannot adequately defend its citizens they must defend themselves.," he said.
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STV in Scotland: Report claims austerity will make UK poorer
The Scottish Trades Union Congress (STUC) has published a report on the coalition government's performance since it took office two years ago.
The union report's name? "Yes, the time has come to say 'we told you so'"
It finds growth forecasts have been continually revised down and the private sector has been unable to counterbalance the large-scale job losses in the public sector.
It also claimed that measures such as the cut in the 50p top tax rate gave the lie to the Conservatives' slogan "we're all in this together".
The report, titled "Yes, the time has come to say 'we told you so'", reflects on the progress made in a range of economic and social policies.
It argues forcefully for a return to Keynesian economics, claiming that public investment is needed to stimulate the economy at times of low growth.
The report says: "Growth forecasts have been consistently revised down. Private sector jobs growth has been weaker, public sector job losses higher and business investment much lower than anticipated.
"Ministers might seek to blame this appalling story on external factors but the facts suggest that they must look much closer to home to identify the problem."
The report also finds that jobs growth in the private sector had been "nowhere near sufficient" to compensate for job losses in the public sector.
A spokesman for the STUC said: "We believed the decision to force rapid austerity on a weak economy was unnecessary and irresponsible.
"We argued that the lessons of economic history are unequivocal: when unemployment is high, the output gap large and interest rates already close to zero, public investment is required to grow the economy and get people back to work.
"Austerity would undermine recovery in the private sector directly through the loss of Government contracts and indirectly as jobs were lost and wages squeezed.
"Unemployment would remain higher for longer than necessary and the human, social and economic costs would weigh on society for decades. Society's most vulnerable would be hit hardest as benefits and services were lost or cut."
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Robert Kuttner, senior fellow at Demos, a progressive US think tank:
It should be clear by now from the Greek experience that this strategy backfires. The latest case in point is Spain. The new Spanish conservative government is dutifully cutting Spain's budget. This only reduces the projected growth rate, widens the projected deficit, spooks money markets, and increases the interest costs Spain has to pay to finance its debt. Spain chases its tail, and chases the economy downward.
Deflating your way to prosperity is a fool's errand. It depresses the real economy, and there is no reward from the speculators of the private money markets no matter how much austerity you pursue.
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Peter Hartcher in the Sydney Morning Herald: French fired up for new revolution on austerity
... the larger meaning of the [French] election was that it was anti-austerity. This was the strand running through the support for Hollande with 28.6 per cent, Le Pen with 18 per cent, Melenchon with 11.1 per cent and the Greens' Eva Joly with 2.3 per cent - a combined 60 per cent of votes cast. They all reject the fiscal austerity pact as one of their central policies. The pro-austerity Sarkozy won 27.1 per cent.
If Sarkozy loses, he will become the 11th leader of a eurozone nation to be thrown out since the European debt crisis took hold in 2009.
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