Austerity Faces Sharper Debate After European Elections
New York Times
by on May 7, 2012 
France's newly-elected president, François Hollande, waved to supporters as he arrived at his campaign headquarters in Paris on Monday.
PARIS — Hours after voters in France and Greece delivered sharp rebuttals to advocates of austerity as the antidote to Europe's financial crisis, Chancellor Angela Merkel of Germany on Monday pointedly insisted that neither she nor her government favored a renegotiation of a fiscal pact underpinning the Continent's belt-tightening.
Multimedia
Ms. Merkel's remarks at a news conference in Berlin came as the victorious, socialist François Hollande prepared to succeed Nicolas Sarkozy as president of France. Her remarks underscored both the abiding significance of the axis between Paris and Berlin that drives European decision-making and the competing visions of austerity and stimulus as ways to combat crushing debt.
The balance between reducing borrowing and addressing popular anger at austerity measures is proving complicated for Europeans, and Mr. Hollande has said that he intends to give "a new direction to Europe," demanding that a European Union treaty limiting debt be expanded to include measures to stimulate economic growth.
Ms. Merkel said she telephoned Mr. Hollande on Sunday night to congratulate him on his victory. On Monday, she stepped up her efforts to avoid any appearance of a strained relationship with the new French leader after working so closely with Mr. Sarkozy that their collaboration became known as "Merkozy."
"I may say from my side that François Hollande will be welcomed with open arms here in Germany by me," Ms. Merkel said. "We will work together well and intensively."
But she insisted that the fiscal pact negotiated with Mr. Sarkozy and endorsed by 25 European Union member states was "not negotiable."
"We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries," she said.
"We are in the middle of a debate to which France, of course, under its new president, will bring its own emphasis," she said. "But we are talking about two sides of the same coin — progress is only achievable via solid finances plus growth."
Her reference to growth was apparently designed to suggest that she was not ruling out some kind of compromise.
Her remarks came in the wake of elections in France and Greece that punished leaders advocating austerity, leaving Europeans on Monday to contemplate a new and untested political landscape shaped by competing demands for austerity to counter the debt crisis and growth to avert further deprivation.
With final results of the French presidential election announced on Monday, the socialist Mr. Hollande had secured 51.62 percent of the runoff vote.
In broad terms, the French vote unsettled center-right governments across Europe, while their center-left adversaries felt emboldened, hoping that the triumph of one socialist leader presaged a wider resurgence.
But the nub of the ideological and fiscal contest lay in the Continent's traditional driving axis between Berlin and Paris, with Mr. Hollande promising to rewrite the austerity-driven pact struck between Mr. Sarkozy and Ms. Merkel.
News of Mr. Hollande's election was splashed across the front pages of Germany's newspapers. But it shared the space with coverage of setbacks for Ms. Merkel's governing coalition at local elections in Germany's northernmost state that may affect her room for maneuver in advance of national elections next year.
Ms. Merkel's political opponents, though, seemed cheered. Sigmar Gabriel, head of the opposition Social Democrats, said on Monday that the result in France showed that "the politics of Angela Merkel and Nicolas Sarkozy led Europe deeper into crisis."
The victory for Mr. Hollande will "not only change France, but finally help Europe to go in another direction," he said.
In effect, Mr. Hollande's commitment to negotiating a new pact for the battered euro zone seemed to challenge Ms. Merkel's dominance of the debate, projecting France as the vaunted champion of a wider movement of people no longer prepared to go along with threats to cherished living standards.
"Austerity need not be Europe's fate," Mr. Hollande declared after his victory was announced.
"You are much more than a people who want change," Mr. Hollande told a huge crowd in Paris gathered to celebrate his victory at the Place de la Bastille. "You are already a movement that is rising across all of Europe and maybe the world."
The combative mood in France and the electoral rise of extreme challengers to the traditional titans of Greek politics in Athens left markets unsettled, with the euro at its lowest against the dollar in months. Stock markets in Asia and Europe stumbled.
Alan Cowell reported from Paris, and Nicholas Kulish from Berlin. Reporting was contributed by Elisabetta Povoledo from Rome, Raphael Minder from Madrid, Rachel Donadio from Athens, Andrew E. Kramer from Moscow, David D. Kirkpatrick from Cairo, Ravi Somaiya from London, and Douglas Dalby from Dublin.
France's newly-elected president, François Hollande, waved to supporters as he arrived at his campaign headquarters in Paris on Monday.
PARIS — Hours after voters in France and Greece delivered sharp rebuttals to advocates of austerity as the antidote to Europe's financial crisis, Chancellor Angela Merkel of Germany on Monday pointedly insisted that neither she nor her government favored a renegotiation of a fiscal pact underpinning the Continent's belt-tightening.
Multimedia
Ms. Merkel's remarks at a news conference in Berlin came as the victorious, socialist François Hollande prepared to succeed Nicolas Sarkozy as president of France. Her remarks underscored both the abiding significance of the axis between Paris and Berlin that drives European decision-making and the competing visions of austerity and stimulus as ways to combat crushing debt.
The balance between reducing borrowing and addressing popular anger at austerity measures is proving complicated for Europeans, and Mr. Hollande has said that he intends to give "a new direction to Europe," demanding that a European Union treaty limiting debt be expanded to include measures to stimulate economic growth.
Ms. Merkel said she telephoned Mr. Hollande on Sunday night to congratulate him on his victory. On Monday, she stepped up her efforts to avoid any appearance of a strained relationship with the new French leader after working so closely with Mr. Sarkozy that their collaboration became known as "Merkozy."
"I may say from my side that François Hollande will be welcomed with open arms here in Germany by me," Ms. Merkel said. "We will work together well and intensively."
But she insisted that the fiscal pact negotiated with Mr. Sarkozy and endorsed by 25 European Union member states was "not negotiable."
"We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries," she said.
"We are in the middle of a debate to which France, of course, under its new president, will bring its own emphasis," she said. "But we are talking about two sides of the same coin — progress is only achievable via solid finances plus growth."
Her reference to growth was apparently designed to suggest that she was not ruling out some kind of compromise.
Her remarks came in the wake of elections in France and Greece that punished leaders advocating austerity, leaving Europeans on Monday to contemplate a new and untested political landscape shaped by competing demands for austerity to counter the debt crisis and growth to avert further deprivation.
With final results of the French presidential election announced on Monday, the socialist Mr. Hollande had secured 51.62 percent of the runoff vote.
In broad terms, the French vote unsettled center-right governments across Europe, while their center-left adversaries felt emboldened, hoping that the triumph of one socialist leader presaged a wider resurgence.
But the nub of the ideological and fiscal contest lay in the Continent's traditional driving axis between Berlin and Paris, with Mr. Hollande promising to rewrite the austerity-driven pact struck between Mr. Sarkozy and Ms. Merkel.
News of Mr. Hollande's election was splashed across the front pages of Germany's newspapers. But it shared the space with coverage of setbacks for Ms. Merkel's governing coalition at local elections in Germany's northernmost state that may affect her room for maneuver in advance of national elections next year.
Ms. Merkel's political opponents, though, seemed cheered. Sigmar Gabriel, head of the opposition Social Democrats, said on Monday that the result in France showed that "the politics of Angela Merkel and Nicolas Sarkozy led Europe deeper into crisis."
The victory for Mr. Hollande will "not only change France, but finally help Europe to go in another direction," he said.
In effect, Mr. Hollande's commitment to negotiating a new pact for the battered euro zone seemed to challenge Ms. Merkel's dominance of the debate, projecting France as the vaunted champion of a wider movement of people no longer prepared to go along with threats to cherished living standards.
"Austerity need not be Europe's fate," Mr. Hollande declared after his victory was announced.
"You are much more than a people who want change," Mr. Hollande told a huge crowd in Paris gathered to celebrate his victory at the Place de la Bastille. "You are already a movement that is rising across all of Europe and maybe the world."
The combative mood in France and the electoral rise of extreme challengers to the traditional titans of Greek politics in Athens left markets unsettled, with the euro at its lowest against the dollar in months. Stock markets in Asia and Europe stumbled.
Alan Cowell reported from Paris, and Nicholas Kulish from Berlin. Reporting was contributed by Elisabetta Povoledo from Rome, Raphael Minder from Madrid, Rachel Donadio from Athens, Andrew E. Kramer from Moscow, David D. Kirkpatrick from Cairo, Ravi Somaiya from London, and Douglas Dalby from Dublin.
by on May 7, 2012