European Voters Unleash Anti-Austerity Backlash

An anti-austerity backlash by Greek and French voters rattled the eurozone this week, causing uncertainty for the markets and for the euro currency.

On Sunday, voters handed Greece’s radical left coalition a surprise second-place win, and by Tuesday, the group had begun efforts to form a coalition government. The leftist group has called for scrapping the bailout agreements between Greece and the European Union, which has imposed austerity measures on the Greek people in exchange for the funds.

Meanwhile, on Sunday, Socialist Francois Hollande defeated conservative incumbent Nicolas Sarkozy for the French presidency. Hollande promises to steer Europe’s focus away from austerity and toward economic growth through government spending.

Both elections represent a significant blow to German Chancellor Angela Merkel, who had prescribed austerity as the solution to Greece and other nations’ crises, and who had openly supported Sarkozy. Socialist-leaning governments such as those of Madrid and Athens have been quick to rally behind Hollande and his childish promise that prosperity can be indefinitely fueled by printing and borrowing more money. The shift leaves Germany feeling and behaving like the only “adult” in Europe.

In this role, Germany must either choose to allow profligate European leaders to destroy the euro and the dream of European unification, or to take drastic measures to force Europe into a powerful union. Watch for Berlin to choose the latter.