It's pretty clear what European voters don't want.
Austerity was shown the door in Sunday's elections in France and Greece, along with all the politicians who have championed it.
In France, Francois Hollande won — albeit narrowly — against President Nicolas Sarkozy, in a resounding rejection of the austerity-focused administration.
Greeks, in their first opportunity to vote since 2010, wasted no time in ousting the parties that had imposed crippling budget constraints. Many said they'd choose anyone but the current governing coalition. Greeks were willing to put Golden Dawn — a neo-Nazi party that has never won enough support to be politically relevant — into the parliament, rather than reward the governing coalition.
Nobody likes austerity — essentially a fancy word for fiscal belt-tightening. The pinch has perhaps been felt most severely in Greece, where some have killed themselves out of desperation, and others have resorted to a kind of barter economy to survive.
But the real question now is whether their politicians can deliver on the people's demands.
Nobody has yet come up with a way to reduce the debt while spurring growth. But whether they like it or not, politicians interested in staying in office are going to have to reconsider strict fiscal discipline as a solution.
In Greece, whatever governing coalition emerges will face another round of stiff cuts demanded by the EU and the IMF next month. Worry over whether they'll comply is already rankling the markets.
Analysts are also watching the relationship between German Chancellor Angela Merkel and Hollande. (Merkollande? Hollerkel?) Before Hollande was elected, both took opposing positions on austerity. Hollande threatened a 75 percent income tax on the wealthy and vowed to toss out the fiscal pact. Merkel declared Germany wouldn't compromise on their demands for austerity in the EU. But once it became clear that Hollande was actually going to be president, the rhretoric from both camps softened.
But they're back to their hard lines now.
On Sunday, Hollande promised the change voters demanded, saying austerity need not be the only route out of the crisis.
Merkel fired back on Monday, as the German government said it was "not possible" to renegotiate the fiscal pact, according to the BBC.
For more on what's happened — and what's ahead, check out GlobalPost's full coverage:
- Bill Hinchberger, writing for GlobalPost, looks at why Hollande frightens the financial world — and whether their fears are warranted.
- GlobalPost's Stuart Braun and Marina Rigou reports from Athens on the election that has thrown into question the future of its reform program — and heralds more uncertainty for Europe.
- GlobalPost's Siobhan Dowling checks in on how the German government is reacting to the news.
- Tom Fenton explains why Sunday's votes are bound to have left Merkel reaching for the aspirin.
- Barry Neild, GlobalPost's senior correspondent in London covered local elections in the UK, where voters were also tired of austerity.
- Ben Barnier filmed a GlobalPost video on why the French voted the way they did.
- Check out how the markets reacted to the news.
- Meanwhile, there's more of the same in Russia, as President Vladimir Putin was sworn in for a third term.
We'll be following up on the view from Germany and Brussels soon, so stay tuned. I'll update this post once more reports come in.
http://www.globalpost.com/dispatches/globalpost-blogs/chatter/whats-next-the-euro-zone
Follow us: