Reuters blog archive
from The Great Debate UK:
Throughout history it has always been difficult to take something away from someone once you have given it to them. Europe is finding that it is extremely difficult to reign in public finances once they start to go out of control. Democracies don’t like to vote for austerity, which is why Sarkozy lost the Presidency in France, why a radical left party came second in the Greek elections and why the Conservatives got a drubbing at last week’s local elections in the UK.
This tells us something about democracy in the western world. Governments have to manage the public finances directly – they have to sell the debt, do the sums and present budgets. However, the people who vote them into (and out of) power are the public, who rightly in most cases, believe they have worked hard, paid taxes and deserve the services and retirement promises made to them.
So here we have the problem: some governments in the West have unsustainable debt loads and deficit levels and yet they don’t have the popular mandate to try and bring that under control. That isn’t the story all over the west. The Germans and the Dutch agree that the government books should be balanced. But if you asked the rest of Europe if they wanted to reduce public debt levels to make country finances more sustainable at the expense of public services and jobs, the recent election results suggest that you would get a resounding no.
So there isn’t one unified way of thinking about austerity in the West. Some people see it as a virtue, others as a type of hell. So what to do? Europe’s one-type fits all model that is largely designed by Germany could lead to social disorder and radical political parties grabbing the reins of power in Greece. However, the more people fight against austerity the more unlikely it is that their governments can attract enough investors to buy their debt to fund their public spending needs.
from Global Investing:
While market players nervously chew their nails over the Greek election result, the French market is calmly absorbing news of a socialist victory in its own presidential race.
Francois Hollande has defeated half the "Merkozy" austerity titan, and panic is nowhere to be seen. Of course, the feeling that cuts might not quite be best way to spark growth has been building for a while but today brings some confirmation that a new consensus is forming.
German Chancellor Angela Merkel and French President Nicolas Sarkozy kept a distance from the idea of a common sovereign euro zone bond on this week, with France hinting only that it could be a possibility in the very distant future.
But a Reuters poll shows a growing field of investors and economists say a common bond issuance would be the best -- and perhaps the only -- way of solving the debt crisis. In theory, it would allow highly indebted euro zone countries to regain access to commercial markets, while providing investors a safeguard through joint liability.
France's ban on full face veils, a first in Europe, went into force Monday, exposing anyone who wears the Muslim niqab or burqa in public to fines of 150 euros (£131.90). France's five-million-strong Muslim minority is Western Europe's largest, but fewer than 2,000 women are believed actually to wear a full face veil. Many Muslim leaders have said they support neither the veil nor the law banning it.
France's ruling conservative party held a controversial debate on the practice of Islam on Tuesday, rejecting charges of bigotry and saying that airing the issue could help stem the rising popularity of the far-right. President Nicolas Sarkozy called for the discussion on Islam and secularism to address fears that some overt displays of Muslim faith, including street prayer and full-face veils, were undermining France's secular identity.
France's ruling conservatives are pressing ahead with a public debate on Islam and secularism on Tuesday despite criticism that it is an excuse to pander to far-right voters ahead of a general election next year. President Nicolas Sarkozy's UMP party said in December that it would host a public forum to address fears about Islam's role in French society, following controversy over Muslim street prayers, halal-only restaurants and full-face Islamic veils.
The leaders of France's six main religions warned the government on Wednesday against a planned debate on Islam they say could stigmatise Muslims and fuel prejudice as the country nears national elections next year. Weighing in on an issue that is tearing apart President Nicolas Sarkozy's ruling UMP party, the Conference of French Religious Leaders said the discussion about respect for France's secular system could only spread confusion at a turbulent time.
Islam has emerged as a central issue in the campaign for French local elections on Sunday that President Nicolas Sarkozy's party hopes to win by taking a tough line on the integration of France's large Muslim minority.
France will start enforcing a ban next month on full Islamic face veils, officials said on Thursday, meaning any veiled woman can be summoned to a police station and asked to remove her face-covering or pay a fine. Officials say the law is mainly symbolic and police will not call in every veiled woman they see to avoid stigmatising Muslims.
France's far-right National Front said on Friday that a planned national debate on Islam and secularism would boost its support and improve its chances in the presidential election next year. Party leader Marine Le Pen, who took over last month from her father Jean-Marie Le Pen, mocked the planned debate as a new opinion poll showed she could score a strong 20 percent in the first round of the presidential vote.