France and Greece are just the beginning – Europe is entering a downward spiral
By Daniel Hannan
May 7th, 2012
I write in the Daily Mail about Europe’s rejection of austerity. It’s not just the French and Greek election results. Within the past ten days, the Dutch and Romanian governments have also been brought down over their attempts to make savings. The same thing will keep happening across the Continent, at election after election.
Eurocrats, too, are tiptoing away from cuts, belatedly aware of how outrageous it sounded to argue for austerity in the 27 member states while demanding a 6.8 per cent budget increase for themselves. We can expect a very different strategy now, one based on higher spending and deeper European integration. Stand by for Eurobonds, a common finance minister, pan-European taxes, EU-wide stimulus packages etc.
This was, of course, the approach which brought Europe to its present unhappy condition. So why do voters hope to solve the crisis by accelerating the policies which led to it? Much of the blame must attach to the Centre-Right parties currently in office in most national capitals. Though they talk of fiscal prudence, many of them are in reality locked into Euro-corporatism. With a handful of honourable exceptions, they have presided over crony capitalism, more spending, more taxes and more debt. Their failure has opened the door to the angry and populist Left. When the ‘Right’ is represented by Samaras and Sarkozy, it’s no surprise that voters cast around for radical alternatives. After all, when it comes to the euro, the Trotskyists have been proved right. They argued all along that, while the single currency would suit the suits, working people would suffer.
As long as Europe’s élites remain determined to keep the euro, the economic situation will deteriorate. And the worse things get, the likelier people are to demand the high-tax, high-spend policies which caused the mess. The eurozone is now in a vicious circle.