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European voters say no to austerity

LONDON — Voters in France and Greece redrew Europe's political map Sunday in a powerful backlash against the German-led cure for the region's debt crisis: painful austerity.

In France, voters swept Francois Hollande into the nation's highest office, ejecting President Nicolas Sarkozy and bringing the Socialists back to the Elysee Palace for the first time in 17 years. Along with German Chancellor Angela Merkel, the blunt-talking Sarkozy was a chief architect of Europe's push to restore confidence in the euro through tough fiscal discipline. In contrast, Hollande vowed to focus on economic growth, arguing that the singular emphasis on spending cuts has weighted down Europe with recessions and soaring unemployment.

Yet potentially more disruptive to Europe's crisis management plans, furious voters in Greece dealt a powerful blow to traditional parties that backed the tough terms of the country's massive international bailout. The result left centrists in Athens scrambling to form a fragile new government against strengthened ranks of the far left and right. Even the leader of a center-right party that earned the most votes — New Democracy — backtracked on a pledge to support the bailout conditions late Sunday, casting fresh doubt on Greece's rescue deal and the nation's ability to remain within the euro zone.

The results in France and Greece came after a tumultuous few weeks in which the Dutch government fell and Britain's Conservative-led coalition received a licking in local elections. In all cases, front and center was the growing debate over austerity versus growth, with opponents of strict cuts arguing that they are succeeding only in driving the region's economies into the ground.

The pushback in Europe could hold tough lessons for the United States, where government spending and the deficit have emerged as major election-year issues. Presumed Republican nominee Mitt Romney has vowed to cut the deficit at a faster pace than President Barack Obama. But the mixed results of such policies in Europe — where a voter backlash has brought down leaders in Italy, Spain, Ireland, Portugal and now France and Greece — could make the argument for speedy deficit reduction increasingly difficult.

In France, Hollande won 52 percent of the vote and Sarkozy had 48 percent in a runoff, according to exit polls. The result marked a clear although not overwhelming margin by the standards of recent French presidential elections.

Hollande's triumph was tempered by the still-fragile economic situation in France, which hems in the victor no matter what his ideology with a need to increase taxes and reduce government expenditures to lower a crushing $2 trillion government debt. In any case, Hollande's free-market, social-democracy version of socialism carried no pledges of radical change — unlike the nationalizations that followed his party's presidential victory by Francois Mitterrand in 1981.

In a victory address, Hollande emphasized, however, that he intends to insist with fellow European leaders that more effort be placed on economic stimulus measures alongside the austerity that has plunged much of Europe into recession. He promised "a new departure for Europe" in which addressing growth and unemployment would get equal priority with balancing budgets.

In Europe, the changing political landscape is throwing up new challenges as the region struggles to end a debt crisis that has loomed over the global economy for more than two years. Merkel has led the argument that such woes can be fixed only by foisting fiscal restraint — of the kind Germany imposed after its 1990 reunification — on heavily indebted nations that share the euro.

But Merkel's party faced a setback in regional elections Sunday, with her Christian Democrats in danger of losing power in their fourth state in two years after their worst showing in Schleswig-Holstein since 1950.

Analysts say voters across the region generally appear to support the notion of good-fiscal governance and balanced budgets. But those spending cuts appear to have come too quickly for European electorates, and they see their leaders as unable to link the austerity measures with new engines of growth.

"We have a problem, and all of Europe has a problem," with austerity, said Eleni Vardakis, 42, a nurse at a public hospital in Athens who voted Sunday.

Public health spending has been subjected to major cuts in Greece because of bailout conditions imposed by the International Monetary Fund and the European Union. "People have done enough," Vardakis said. "They're willing to do even more if they see there's a future. We're trying to move toward the light, but it's getting further and further ahead."

Since the onset of Europe's debt crisis in September 2009, the response has been largely guided by two leaders — Merkel and Sarkozy. That partnership was key in drafting the bailouts for Greece, Ireland and Portugal, and in the inking of a fiscal accord for the region in December that places strict and enforceable limits on public spending to reassure investors.

Hollande, however, has vowed to renegotiate that treaty. That position led Merkel to take the unusual step of endorsing Sarkozy ahead of Sunday's vote.

Yet analysts say Hollande — who is set to make Berlin his first official destination as president — will try hard to reach a meeting of the minds with Merkel, who may have to reluctantly agree to new measures aimed at promoting economic growth. Those actions could include new investments in infrastructure projects aimed at creating jobs and pulling some of the region's hardest-hit economies out of recession.

Six nations vote

Six European countries held elections Sunday. Here is a look at what was at stake:

France: Socialist challenger Francois Hollande defeats incumbent Nicolas Sarkozy for the presidency by capitalizing on anger over austerity measures.

Greece: Greeks punish the two main parties in parliamentary elections, with official projections showing no party gaining enough votes to form a government. The results could affect the country's course as it grapples with a debt crisis.

Serbia: Polls show pro-European Union candidate Boris Tadic and nationalist opponent Tomislav Nikolic are headed for a presidential runoff, while the ruling pro-Western party is likely to form the next coalition government.

Germany: Exit polls show voters in Germany's northern state of Schleswig-Holstein likely ousted a center-right government made up of the same parties as the federal coalition, a blow to Chancellor Angela Merkel.

Italy: It's the nation's first election since Premier Mario Monti was tapped to save Italy from its debt crisis. The vote could gauge public anger against parties supporting his austerity measures. Voting Sunday and today will decide 942 city councils and mayorships.

Armenia: President Serge Sarkisian's Republican Party was expected to win the parliamentary elections, but it was aiming for more than half of the seats to avoid having to form a coalition. Results are expected today.

Associated Press

European voters say no to austerity 05/07/12 [Last modified: Monday, May 7, 2012 1:11am]

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