From Under The Cherry Tree | Austerity leads to Ouster in France and Greece..and a Chance to Learn from History?Austerity leads to Ouster in France and Greece..and a Chance to Learn from History? | From Under The Cherry Tree

It should come as no surprise that elections over the weekend produced new leadership in both France and Greece.  After all, both countries have been firmly in the grip of recession and debt for quite some time.  A change in leadership after a prolonged period of economic distress is a trend throughout history – witness that voters embraced the “change” promised by Barack Obama and the Democratic Party after years of George W. Bush and Republican control lead to little economic recovery.  Going further back in American history, the Great Depression was laid at the feet of Herbert Hoover and the Republican party who held power at the time (though it might be said that they had little to do with causing the Depression itself) and the next national election cycle elected a Democrat, Franklin D. Roosevelt to the Presidency.

Though the leadership change alone doesn’t make much of a statement, the overall voting pattern does.  The leading parties in Greece and President Sarkozy in France had both attempted to fix their economies by following the strict austerity measures championed by northern European nations – particularly German Chancellor Merkel.  Austerity attempts to fix the national economy through “belt-tightening” on the part of the national government (greatly reduced government spending coupled with constant or even higher taxes) – the idea being that having a balanced national budget will help balance the economy.  Yet these measures seem to have largely failed – and both Hollande and the previous minority parties in Greece made large gains by promising to undo them.  Indeed, the new governments carried the day by promising to go in the other direction – that is to stimulate the economy into recovery through increased spending.  This is the approach that the US has taken under Bush and Obama, to some success (certainly greater success than that seen in Europe).  Perhaps this vote will push the rest of Europe, including the proponents of austerity, to question their methods and re-evaluate the methods that have been used in the US – imagine that, we might again be an example for the rest of the world to follow!

There was another, even more disturbing, pattern in the voting over the weekend.  In the Greek elections, both of the leading parties had voted for austerity measures and were seen as responsible for the financial crisis.  This lead large numbers of voters to turn to extremist parties – both on the far-left and far-right.  The Golden Dawn Party (who’s stated position on immigration, just as an example, is to place landmines on the borders to keep illegal immigrants out) is a neo-Nazi-like party that went from a 0.3% share in the prior election to a whopping 7% in this election, entitling this uber-extreme right-wing party to a full 21 seats in Parliament!  While it is perhaps understandable that voters would not want to vote for parties seen as “responsible” for deepening the crisis, voting for extremists rarely helps matters.  This is yet another change to learn from history (and to hopefully avoid it’s mistakes) – and one need look no further than austerity’s biggest supporter for history’s worst example.  Like much of the rest of the world, Germany’s Weimar Republic was impacted by the Great Depression, with unemployment levels reaching 30% by 1932.  While this depression lead to a change from Republican to Democratic control in the US, in Germany it lead to a rise in extremist parties just as we are starting to see today in Greece.  A previously fringe party was able to rise and take control of the Reichstag, Adolf Hitler’s Nazi Party – leading directly to World War II.  I think we all can agree this was certainly worse than temporarily high unemployment – and a good lesson to learn from history: no matter how bad things are, look at who you are voting FOR, not just who are you are voting AGAINST.

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One Response to Austerity leads to Ouster in France and Greece..and a Chance to Learn from History?

  1. […] · Add Comment · In Economics, European Economy, European Politics, Political Trends Last week we reported on the change of leadership in the Greek and French elections – with voters […]

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