Watching the election returns yesterday, you wait the day to get home to see what is being said of the bond markets and currency. For the first time in a very real way, you suspect the Eurozone may suddenly become a smaller place. The look of the Greek parliament and Hollande’s visit to Berlin will be very telling and it is here the markets will end their so called grace period. In the meantime the news here is cautious and speculative. Hollande can do little until June when he gets his parliament and most Americans have written off Greece’s euro future already. In this country the biggest discussion is that the Greeks don’t want the currency and the Germans are increasingly happy to leave them to their drachmas no matter how much they have to write off. Most here are convinced the French will stay with the program, at least economically. (The social side of things is another matter.)
The most interesting thing about the Hollande victory is that it seemed to be something Americans did not want regardless of their political leanings. That was the water cooler talk today. We’ve grown accustomed to an austere Europe and stimulus America. We were happy to be the only country that looked toward growth (induced by government) as an economic solution to the global recession. We were in fact happy ClubMed was talking about lowering debt and controlling cost. Actually it was more sinister. We were happy the Nordic countries could impose its will on its southern neighbors. You could never trust those people with money anyway was the nascent thinking of business oriented Calvinist America. Funny thing is the Germans, Dutch, and Norwegians weren’t laughing anymore than the tea party folks were about holding the empty purse when it came to the housing crisis.
Now we have a Mediterranean fringe that seems happy to talk about abolishing austerity measures and in the case of France even looking at stimulus measures. At the end of the day it all comes down to if folks can work and feed their families. If that means having the state increase ownership of industry and pumping money into businesses that the banks will not take the risk on, so be it. Even us Nordic minded Americans did the later and our economy fared better than the European ones, excepting Germany which plowed through the recession and into economic growth with no austerity measures and only 50 billion euro worth of stimulus. The much more interesting part of all of this is what happens to the euro. That future is not as bright, but it does make an European vacation a little more appealing.
One has to be a little disappointed that Sarkozy will soon leave power. He was very cordial with Americans, at least as cordial as one should be. Even when he opposed the invasion of Iraq, he did so with a reserve that is sadly absent from many politicians. And this must have been a little tough, because reserve was never his style. He was one of those few foreign heads of state that Americans actually knew. We thought of him as being a to the right Bill Clinton. We knew less about his issues with his short stature. If we had we would have been all about Napoleon jokes I am sure. His dress also caught our attention. Vanity Fair made him one of the best dressed men alive and GQ one of the worst.
We were not use to a devout French head of state either. In this country, we have long been inculcated with the idea that France is the ultimate secular state. His Catholicism did not keep him from three marriages however and we developed a bit of a fascination for his wife, a model who is rumored to have been with Mick Jagger and was famously kept from a Vatican visit and had a death sentence pronounced on her by the state run Iranian daily. America would probably never in a million years elect a man with multiple marriages or tolerate a first lady of the nature of Carli Bruni.
We have seemingly someone more sedate in the office of the French presidency now. He lacks the flair of Sarkozy and his domestic life, though interesting by American standards, is sedate to many French. We also have someone who will not be as friendly. He is too serious and committed to his socialist principles for such a thing. Still it was hard to hear his acceptance speech and not think this is someone we can work with. Even the Germans are cutting him some slack and they have more at stake in this than we do.
Hollande’s presence also keeps the far right at bay, though with 20% of the vote they will be a force to contend with. This is also good for America in that the fabric of our society can deal with one who leans to the left more than it can the far right. Right now most of us are only looking at the markets and how they react. So far that has been relatively muted. We will also keep an eye on a foreign policy that Hollande promises will change little though he has pledged a French exit from Afghanistan this year.
As we come upon our own election cycle, we Americans will do well to look at Europe. We still have the French legislative elections and the Dutch election to look forward to. The future of the euro and European support of American foreign policy may change drastically before November. If the current state of Europe is any indication, we can expect moves to the right and the left and this can indeed make very moderate America quite nervous. Our consolation is that we will also be watched by those in Europe, where there seems an comprehension and appreciation for our election cycle that too many us here take little interest in. Perhaps if we could look to the other side of the Atlantic and the changes that will ensue with those votes, we can have a better appreciation of our own democratic exercise.