Will the French wave the white flag on fiscal austerity?
A far-reaching plan to curb Europe’s continental government debt crisis by imposing strict caps on government borrowing and spending will face its first major political test in the form of the French presidential election this Sunday, an election pitting President Nicolas Sarkozy, the nation’s center-right leader and avowed defender of the get-tough European debt reduction plan, against a surging technocratic socialist by the name of Francoise Hollande, a man whose big spending economic paradigm is quintessentially Obamian.
The critical subtext of the French election (and many more across Europe in the months to come): Are the Europeans serious about solving their collective debt crisis with meaningful social spending reductions, or will they accelerate fiscal ruin by electing national leaders bent on prescribing more spending as a phony elixir for economic recovery?
The focal point of the Frenchy fight is an accord hammered out by Sarkozy and German Chancellor Angela Merkel, the core of which would amend the treaty that created the European Union with new and strong limitations on government spending and borrowing across the European plain.
Under the pact, if a member of the European Union spends or borrows beyond agreed upon limits, that nation would receive automatic sanctions from other member countries. The rationale: fiscally responsible members of the European Union are fed up with experiencing adverse economic conditions because of the reckless spending of countries like Greece, Portugal and Spain. I’m not a big lover of the European Union, but you gotta’ admit — that’s good stuff.
A simple way to think of the fiscal pact is TABOR-light, only imposed on European socialists accustomed to a palatial social welfare state. Oh yeah, this is going to get hairy.
And hairy is exactly the word to describe the political predicament that Sarkozy faces just days before the election.
As the Eurozone crisis has expanded, Sarkozy has aligned himself closely with Germany’s Merkel, the grand dame of European austerity. After experimenting with bailouts in the early hours of the crisis, Sarkozy and Merkel quickly woke up to the reality that there simply wasn’t enough of someone else’s money in the European central bank to bailout the improvident spenders in their economic alliance.
So austerity became the order of the day — read that, deep cuts in pensions, welfare and health care spending — and Sarkozy and Merkel its unlikely champions.
Cue riots. Cue union protests. Cue the liberal European left screaming at the top of their bleeding-heart lungs that the real solution rested in more government spending to kick start the economy, not spending cuts.
Apparently European progressives are too preoccupied with their own false economic religion to realize that if hyper-aggressive government spending were actually good for the economy, there never would have been a European recession in the first place.
But the socialist elites in France are unpersuaded by stubborn facts, and in Sarkozy’s opponent Hollande, they have a savior. Last week Hollande promised to re-negotiate and weaken the Sarkozy-Merkel European debt-reduction pact if he gets the electoral nod.
Hollande’s wider strategy: solve the European debt crisis by growing the economy, and government revenues with it. OK, that’s good.
His prescription to grow the economy? More government spending. OK, that’s just stupid.
But stupid is a relative term, and sometimes stupid in France sends the masses swooning in delight. That is the case here, as French polls show Hollande with a commanding 5 point lead ahead of the Sunday election.
In fairness, part of Hollande’s lead is a reflection of the fact that the glitzy Sarkozy is an imperfect messenger of a tough-love fiscal policy. But Hollande’s lead is more a reflection of the fact that France just doesn’t seem interested in making the tough choices before them.
In that sense, France may well be the worst possible place on the face of the earth for a first, big electoral fight over government spending austerity.
Sure, the French introduced the world to Democracy. But they also perfected the impulses of the slow-cancer called socialism. They are home to the Vichy’s too.
And unfortunately for France, if they choose socialist Hollande this weekend, they will have invited the comparison to the French Vichy’s – the regional faction who collaborated with Nazi Germany rather than confronting it.
If the French wave the white flag on austerity by electing Sarkozy’s socialist alternative, the voices of fiscal sanity across the globe will have been dealt a blow — and France will have stained itself on the world stage once more.
Josh Penry is a former minority leader of the Colorado Senate. He graduated from Grand Junction High School and Mesa State College.