Europe In Economic Shambles With Looming Political Crisis Ahead
A European economic revolt is on in all its fury. Since the economic crisis that commenced in 2008, 11European leaders have fallen, the last being Nicholas Sarkozy, the President of the second biggest country in Europe last week.
The Economic crisis may lead to a political revolt with countries heavily indebted to Germany and international financial institutions being compelled to take austerity measures – tighten their belts much against the wishes of some of the leaders of these countries as well as the people who are badly affected by economic measures.
The economic collapse that has led to the severe hardships on those affected—some even committing suicide and have left Europeans questioning the validity of the market economy.
Eleven fall down
One such country which saw its leader fall was Italy. The fall of flamboyant septuagenarian Silvio Berlusconi however was not solely due to financial reasons but also due to his scandalous behavior such as his ‘Bunga-Bunga’ parties with teenage stars, prostitutes and the like. But it was the crumbling Italian economy that finally made him bite the dust after he had been warding off pressures of irate conservative Italians who were scandalized by his unconventional behavior. Others to fall were: President Rodriguez Zapetero of Spain following the ‘burst of the real estate bubble’, Prime Minister Gordon Brown over the weakening of the British economy, Prime Minister Brian Cowen of Ireland, Socialist leader Georges Pompandreaou of Greece after the worst financial crisis faced by his country after World War 11, Jose Socratese the Centre left socialist of Portugal, Prime Minister Roberto Fico of Slovakia, Prime Minister Mari Kiviniemi of Finland, Prime Minister Iveta Radicova f Slovenia and Prime Minister Mark Rutte of the4 Netherlands.
The defeat of Sarkozy by Francois Hollande of the socialist party who have been described as a ‘card carrying socialist’ by some commentators as giving a chance for the change of direction in economic policy not only in France but other European countries as well and shaken even ‘the citadels of fiscal orthodoxy’ in Brussels, Frankfurt and Berlin. Hollande was elected on a platform of jobs, higher taxes on the rich and renegotiation of the Eurozone fiscal Pact which binds heavily indebted European countries to strict austerity measures — cut government spending and cause immense difficulties to the less privileged.
The austerity measure calls for cutting off jobs and pay while increasing taxes and has not reduced government borrowing, reduced debt let alone economic recovery. Critics of the austerity measures imposed say it has deepened recession and increased debt, destroyed jobs squeezing living standards across the Eurozone. These indebted European countries are held to their commitments by the Eurozone Fiscal Pact which has given bail-out packages to these countries to avoid bankdruptcy. Though they are designed to make the economies recover they are crumbling and there are even suggestions in some countries that a breakaway from the Eurozone and also delinking from the Euro currency may help. These however are considered by most Europeans as too extreme measures. Francois Hollande on is victory declared that he would renegotiate the Eurozone Fiscal Pact but Angela Merkel the German Chancellor has ruled out renegotiating it. How the emergence of Hollande will influence the economic direction Europe will take is to be seen but his statements have already been considered ‘political dynamite’ and weakened the German led austerity axis.
European economies have shown the tendency to move to opposite ends of the political spectrum when threatened with economic collapse. The collapse of the Weimar Republic after World War 1 and the economic collapse resulted in the emergence of the Nazis with Adolf Hitler. France in the recent election saw the emergence of the extreme right of the National Front led by Marine Le Pen who got 17.5 per cent of the vote in the first round of the presidential election. Even the centre right Sarkozy moved towards the extreme right in an attempt to capture this rightist vote from the National Front but they opted to keep out of the second round of voting. Sarkozy’s swing towards the right in the second round on the issue if immigration even pushed socialist Hollande in this direction. In th final stages of his campaign he declared that ‘in a crisis, a cap on economic migration was not only necessary but indispensible’.
Greece is by far the worst affected country in Europe by this crisis. Elections held a week ago was described as ‘an electoral earthquake that destroyed the political establishment which had dominated the country for 40 years’ .The support for governing parties fell from 80 oer cent to 30 per cent while the left parties that rejected privatization and unachievable debt payments surged ahead of both established parties and the nationalist right. The Facist Golden Dawn Party won 7 per cent of the vote qualifying them for entry to parliament but he radical left Syriza party surpassed them with 17 per cent of the vote.
The plight of Greece is indeed tragic. The suicide rate had jumped 40 per cent in the first five months last year. The tragedy of Greece is well illustrated by a 55 year old Greek businessman. When he called at hs bank they refused to see him.
He had only 10 Euros (USD 13) in his pocket. Out of work and bankrupt he thought all he could do with his 10 Euros was to buy a can of petrol. He doused himself with the fuel and set himself in flames. The police fortunately was able to save him and rush him to hospital. Less fortunate was a 77 year old pharmacist wh shot himself with hand gun in a busy square in Central Athens during the rush hour. He did so in protest against the financial crisis gripping the nation.
With the Greek political system in shambles after the election it is likely that another election will be held. But that will not resolve the debt crisis of billions of dollars.