Will Elections in France and Greece Ruin Europe?
Voters in France and Greece have strongly rejected the politics of austerity, electing a president and parliament that vow to soften Europe's plan to slash government spending.
What's the Latest Development?
France has a new president, Greece has a new parliament, and Europe may have a new financial and political agenda. In France, socialist party candidate Francois Hollande has returned his party to power for the first time since 1995. In Greece, disfavor for politicians who implemented budget cuts ran deep, with voters preferring to elect members of the neo-Nazi party Golden Dawn than reinstate incumbents. Both countries' voters rejected the economics of austerity, where the solution to Europe's economic crisis has been to cut back on government spending, often in areas like health and education.
What's the Big Idea?
President-elect Hollande has spoken publicly about his desire to renegotiate continent-wide financial agreements which set targets for the reduction of government spending. The conditions were largely set by Germany in exchange for funding much of Greece's bailout package. During the campaign, Hollande threatened a 75% tax rate on the wealthy if the agreements were not renegotiated. German Chancellor Angela Merkel has said her government considers a renegotiation of the agreements' financial terms "impossible". What remains to be seen is how the new Greek parliament will enforce austerity requirements.
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