Re: New EC Thread

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7 May 2012 Last updated at 06:19 Share this pageEmail Print Share this page


Greece's two governing parties, which back tough austerity measures, have lost their parliamentary majority in Sunday's election.

With almost all votes counted, centre-right New Democracy is leading with 18.9%, down from 33.5% in 2009.

Centre-left Pasok is in third place with 13.2%, down from 43.9% in the last elections. Left-wing coalition Syriza is in second place with 16.7%.

Pasok and New Democracy have been in coalition since last November.

There is widespread anger across Greece to harsh measures imposed by the government in return for international bailouts.

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Greece has been plunged into a period of intense instability. The conservative New Democracy and the socialist Pasok parties seem to have been beaten into third place by an anti-bailout leftist coalition, Syriza. Its leader, Alexis Tsipras, says he wants to attempt to form an alternative government rejecting Greece's bailout commitments.

In another rejection of the political mainstream, the far right anti-immigrant Golden Dawn party looks set to sweep into parliament for the first time.

There are now plenty of questions: could New Democracy urge fresh elections if it fails to gain enough MPs with the Socialists to form a stable coalition? Could the call for an anti-bailout government be heeded, potentially threatening Greece's membership of the euro?

Days of wrangling lie ahead. What is clear is that a majority of Greeks have spoken out against austerity. It could be very hard for the international community to demand yet more cuts.

The neo-Nazi Golden Dawn party could enter parliament for the first time if their tally of almost 7% holds up.

New Democracy leader Antonis Samaras said he would form a national salvation government to keep the country in the euro.

But he said he would seek to "amend" Greece's controversial EU-IMF bailout agreement in order to boost growth.

Syriza leader Alexis Tsipras said he wanted to form a left-wing coalition rejecting the terms of Greece's bailouts.

"The parties that signed the memorandum (with the EU and the IMF) are now a minority. The public verdict has de-legitimised them," he said.

"Our proposal is a left-wing government that, with the backing of the people will negate the memorandum and put a stop to our nation's predetermined course towards misery."

'Particularly painful'

Pasok leader and former Greek Finance Minister Evangelos Venizelos called for a broad coalition government of pro-European parties.

"A coalition government of the old two-party system would not have sufficient legitimacy or sufficient domestic and international credibility if it would gather a slim majority," he said.

"A government of national unity with the participation of all the parties that favour a European course, regardless of their positions toward the loan agreements, would have meaning."

He added: "For us in Pasok, today is particularly painful. We knew the price would be heavy and we had undertaken for a long time to bear it."

Pasok was in power when Greece negotiated the terms of its 2010 bailout of 110bn euros (£88bn; $143bn) and was in a coalition with New Democracy when it secured this year's 130bn euro deal.

In fourth place in the partial results was the new right-wing Independent Greeks with 10%.

Its leader, Panos Kammenos, has already ruled out co-operation with either Pasok or New Democracy, Athens News reported.

Fresh savings

Coalition negotiations can take place over three days. If they fail, the party in second place can try to form a coalition, and if still unsuccessful, the third party will receive the mandate.

Golden Dawn supporters celebrated after exit polls predicted their party would enter parliament
If still no coalition emerges, Greece will hold another election - a prospect which would alarm the country's international creditors.

The ability of any new government to carry on with the austerity programme will be crucial for Greece's continued access to bailout funds from the EU, the European Central Bank and the International Monetary Fund - the so-called Troika.

Any political instability may prompt fresh questions over the country's place in the eurozone.

Under the current plan, a further 11bn euros of savings in spending are due to be found in June.

Othan Anastasakis, director of south-east European studies at Oxford University, said it would be unprecedented if no party won more than 20% of the vote.

"The whole landscape becomes even more unpredictable after the election. We don't know if there will be a coalition or how long it will survive. I don't see it surviving very long.

"Greeks are sending a very strong message abroad, which is 'enough with austerity'

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May 6, 11:13 PM EDT


France gets new leader, Europe new direction

By ANGELA CHARLTON and ELAINE GANLEY









PARIS (AP) -- France handed the presidency Sunday to leftist Francois Hollande, a champion of government stimulus programs who says the state should protect the downtrodden - a victory that could deal a death blow to the drive for austerity that has been the hallmark of Europe in recent years.

Mild and affable, the president-elect inherits a country deep in debt and divided over how to integrate immigrants while preserving its national identity. Markets will closely watch his initial moves as president.

He narrowly defeated the hard-driving, attention-getting Nicolas Sarkozy, an America-friendly leader who led the country through its worst economic troubles since World War II but whose policies and personality proved too bitter for many voters to swallow.

"Austerity can no longer be inevitable!" Hollande declared in his victory speech after a surprising campaign that saw him transform from an unremarkable figure to an increasingly statesmanlike one. He will take office no later than May 16.

Speaking to exuberant crowds, Hollande portrayed himself as a vehicle for change across Europe.

"In all the capitals ... there are people who, thanks to us, are hoping, are looking to us, and want to finish with austerity," he told supporters early Monday at Paris' Place de la Bastille. "You are a movement lifting up everywhere in Europe, and perhaps the world."

Celebrations continued into the night on the iconic plaza of the French Revolution, with revelers waving French, European and labor union flags and climbing the base of its central column. Leftists were overjoyed to have one of their own in power for the first time since Socialist Francois Mitterrand was president from 1981 to 1995.

Sarkozy is the latest victim of a wave of voter anger over spending cuts in Europe that has ousted governments and leaders in the past couple of years.

In Greece, a parliamentary vote Sunday was seen as critical to the country's prospects for pulling out of a deep financial crisis felt in world markets. A state election in Germany and local elections in Italy were seen as tests of support for the national governments' policies.

In France, with 95 percent of the vote counted, official results showed Hollande with 51.6 percent of the vote compared with Sarkozy's 48.4 percent, the Interior Ministry said. The turnout was a strong 81 percent.

"Too many divisions, too many wounds, too many breakdowns and divides have separated our fellow citizens. This is over now," Hollande said in his victory speech, alluding to the divisive Sarkozy presidency. "The foremost duty of the president of the Republic is to unite ... in order to face the challenges that await us."

Those challenges are legion, and begin with Europe's debt crisis.

Hollande has said his first act after the election will be to write a letter to other European leaders calling for a renegotiation of a budget-trimming treaty aimed at bringing the continent's economies closer together. Hollande wants to allow for government-funded stimulus programs in hopes of restarting growth, arguing that debts will only get worse if Europe's economies don't start growing again.

Sarkozy and Germany's Angela Merkel spearheaded the cost-cutting treaty, and many have worried about potential conflict within the Franco-German "couple" that underpins Europe's post-war unity.

Merkel called Hollande to congratulate him on his victory. Hollande has said his first trip would be to Berlin.

President Barack Obama also offered congratulations and an invitation to the White House ahead of this month's summit of the Group of Eight leading economies at Camp David, Md., the White House said. After that, Hollande will attend a NATO summit in Chicago, where he will announce he is pulling French troops out of Afghanistan by the end of the year.

While some market players have worried about a Hollande presidency, Jeffrey Bergstrand, professor of finance at the University of Notre Dame, said it's a good thing that Hollande will push for more spending throughout Europe to stimulate the economy.

Europe is "going into a really serious and poor situation," Bergstrand said. Hollande "is going to become the speaker for those countries that want to do something about economic growth."

Sarkozy conceded defeat minutes after the polls closed, saying he had called Hollande to wish him "good luck" as the country's new leader.

"I bear responsibility. ... for the defeat," he said. "I committed myself totally, fully, but I didn't succeed in convincing a majority of the French. ... I didn't succeed in making the values we share win."

Sarkozy came to office on a wave of hope for change that critics say he squandered even before the economic crises hit. They saw his tax reforms as too friendly to the rich, his divorce in office and courtship of supermodel Carla Bruni as unseemly, and his sharp tongue as unfitting for his esteemed role.

French politicians now turn their attention to parliamentary elections next month. With what appears to be a thin victory margin, Hollande must more than ever count on a healthy majority in June legislative elections - the next challenge for Sarkozy's conservatives.

"The hour is one of mobilization. ... We must not give all the power to the left," said Jean-Francois Cope, leader of Sarkozy's UMP party.

The Socialists will have blanket control of the country if they get a majority in the decisive lower house of parliament. They already preside over the Senate and hold most regions and municipalities in France.

Hollande has pledged to tax the very rich at 75 percent of their income, an idea that proved wildly popular among the majority of people who don't make nearly that much. But the measure would bring in only a relatively small amount to the budget, and tax lawyers say France's taxes have always been high and unpredictable and that this may not be as much of a shock as it sounds.

Hollande wants to modify one of Sarkozy's key reforms, over the retirement age, to allow some people to retire at 60 instead of 62. He wants to hire more teachers and increase spending in a range of sectors, and ease France off its dependence on nuclear energy. He also favors legalizing euthanasia and gay marriage.

Sarkozy supporters call those proposals misguided.

"We're going to call France the new Greece," said Laetitia Barone, 19. "Hollande is now very dangerous."

Sarkozy had said he would quit politics if he lost, but was vague about his plans Sunday night.

"You can count on me to defend these ideas, convictions," he said, "but my place cannot be the same."

Sarkozy alienated many voters with a lunge to the right during the last two weeks of campaigning as he tried to lure backers of the far-right anti-EU and anti-immigration candidate Marine Le Pen, leader of the National Front party.

People of all ages and ethnicities celebrated Hollande's victory at the Bastille. Ghylaine Lambrecht, 60, who celebrated the 1981 victory of Mitterrand, was among them.

"I'm so happy. We had to put up with Sarko for 10 years," she said, referring to Sarkozy's time as interior and finance minister and five years as president. "In the last few years, the rich have been getting richer. Now long live France, an open, democratic France."

"It's magic!" proclaimed Violaine Chenais, 19. "I think Francois Hollande is not perfect, but it's clear France thinks it's time to give the left a chance. This means real hope for France. We're going to celebrate with drink and hopefully some dancing."

---

Jamey Keaten in Tulle, France, and Elaine Ganley, Sarah DiLorenzo, Thomas Adamson, Greg Keller, Sylvie Corbet and Cecile Brisson in Paris contributed to this report.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.

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Ollie Rhen says the existing fiscal policy should be replaced but Schauble says it must continue

Hollande has said he wants to balance the books by 2017. This is based on fiscal growth so he will have to make radical changes to make this happen
and one French analyst says 2017 is too optimistic.

Merkel realises she has to do business with Holllande and has her own problem, her Political Party has lost 41 counccil seats with more Elections to
take place next Sunday.

Greece is still looking for the E11 billion bailout agreed earlier so cannot do anything to jeopardise this. Before the Election analysts said there was a
50% chance of Greece leaving the Eurozone, now it is 50 to 75%.

Warren Buffet, known Worldwide for his investment gains, sitting on a $38 billion cash in the Bank, says the ECB loans to Eurozone Banks could be vulnerable if the Banks use the money to repay loans instead of retaining liquidity.

The Euro has weakened as has European Stocks .

[fuzeta]

It is quite extraordinary is'nt it that the minting of a one size fits all coin has caused such chaos, poverty and distruction of nations that the euro has. Mind you anyone with half a brain cell could see it would. What a total catastrophe it all is. It just makes me so sad to watch it happen.

It is all about power and control but when all is laid waste what will there be?

Moprning fuzeta, I thoing this is the beginning of the end of the Euro.

Me too, especially with the results in France! I expect Merkel is none too happy

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Apparently Greek election has not one Party with overall majority , so they are in talks with the President to try to form a coalition ,if none of the
Parties want to form one another Election will be held in 4 Weeks.

Sony have just announced that with the continuing decline in the Euro, the Comany has lost E6 BILLION , many other Companies have lost , but Germany is O.K. now, their exports will be cheaper. Merkel has done too much damage with her stringent austerity plan and her Political future is now
in the balance judging by her Party's losses in the Council Elections.

If they had let Greece default in the very beginning a lot of this mess could have been avoided.

[frencheuropean]

At last we got rid of Sarkozy the most unpleasant, vulgar and cynical president France ever had.He was hated.
I trust François Hollande because he is honnest, clever and loves his country more than himself. I am sure he will be a great president, even if the circumstances are not easy.

[Panda]

At last we got rid of Sarkozy the most unpleasant, vulgar and cynical president France ever had.He was hated.
I trust François Hollande because he is honnest, clever and loves his country more than himself. I am sure he will be a great president, even if the circumstances are not easy.

Morning frenchperson, there was a T.V. discussion about him earlier, apparently he started his Political career working for Mitterend, and his big break
came when Strauss Khan was jailed, which enabled him to lead the Socialist Party. He is a consensus Politician and will have long discussions with his Cabinet before making a decision, unlike Sarkozy .

It must be said he faces a mammoth task because the World is in recession and it is hard to see where the growth will come from. Also, Analysts are
saying he still will have to impose austerity so it will be interesting to know whay he does.

[Claudia79]

At last we got rid of Sarkozy the most unpleasant, vulgar and cynical president France ever had.He was hated.
I trust François Hollande because he is honnest, clever and loves his country more than himself. I am sure he will be a great president, even if the circumstances are not easy.

He may not be a great President. But he certainly can't be worse than Sarko. And if Merkel is angry about his election, then I find that a bonus!

[jd16]

At last we got rid of Sarkozy the most unpleasant, vulgar and cynical president France ever had.He was hated.
I trust François Hollande because he is honnest, clever and loves his country more than himself. I am sure he will be a great president, even if the circumstances are not easy.

Don't be fooled to think Hollande is honest and loves the country more than himself. We had this with blair and I am seeing in France now exactly what we in the UK went through in 1997....how ugly this turned out in the end. Beware of giving someone too much power, they will abuse it. Hollande is just all words at the moment to get the votes, lets see his actions over time

Wasn't it Hollande who was having the affair with his secretary behind wife/partners back of his 4 kids. He wasn't honest to his wife so not showing any good traits

In the UK, Ed Milliband must be the most nervous as if Hollande's economic plan does not work (which I don't think will), this will be very bad news for him

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Iv'e just been watching a retired Investment Manager being interviewed and he says the Euro is doomed and it was a huge mistake to expect 17 Countries to be on the same level of productivity , financial probity and the only gainer in all this is Germany. He says because there isn't a Central Bank as in the U.S.A. and Britain, individual Countries are unable to adapt by altering their exchange rate and introducing quantitive easing as a stimulus..

He foresees a big recession around the World, but particularly in the EU.

As for Tony Blair, he did more damage to the Honesty of British Politics, took British Troops into a War that was a lie and
Gordon Brown "no more boom or bust" sounds very hollow now.

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Greek election uncertainty weighs on markets

By PAN PYLAS
AP Business Writer


AP Photo/Shizuo Kambayashi









LONDON (AP) -- Elections in Greece and France renewed uncertainty over Europe's debt crisis, causing a massive drop on the Athens exchange, though losses elsewhere were trimmed as investors regained their poise and Spain announced it will help its banks.

Greece's election resulted in a massive loss of support for the two parties of the previous coalition government that had backed the austerity demanded by creditors in return for crucial bailout funds. Votes transferred mostly to extremist parties, making it very difficult to form a new coalition government that would support the current rescue package, meaning anther election may be held in two months.

Antonis Samaras, leader of conservative New Democracy, which won the most votes is currently trying to form a government, but amid the uncertainty, investors took fright.

Greek shares took a pounding, underperforming all others with a near 7 percent retreat on the main Athens exchange.

"Financial markets loath uncertainty, and so the reaction seen to the elections makes a great deal of sense," said David White, a trader at Spreadex.

Elsewhere in Europe, however, the early downbeat mood improved somewhat as investors awaited the arrival of Francois Hollande as French president following his defeat of Nicolas Sarkozy on Sunday.

Hollande campaigned on the need for more growth-generating economic policies and less reliance on austerity. While economists agree more growth would help fight the debt crisis, some fear Hollande could upset the current balance in European policies, with uncertain consequences.

"The market will likely cautiously wait to gauge to what extent Hollande will want to renegotiate the French position about fiscal and economic matters in Europe," said Jan Dubsky, an analyst at Royal Bank of Scotland.

That reflective approach was evident in the performance of the CAC-40 in France, which following early losses, was trading 0.3 percent higher at 3,170.

Germany's DAX also trimmed losses to be trading only 0.6 percent lower at 6,523 after new figures showed the country's factory orders rose 2.2 percent in March, more than expected, despite an economic downturn in Europe.

Also helping markets recover from early losses was Spain's decision to present bank clean-up measures this week to alleviate doubts about the sector - a key source of worry over whether Spain might need a financial bailout. Prime Minister Mariano Rajoy said he would not rule out lending, or injecting public money into the sector if necessary.

Madrid's main stock index rallied 1.4 percent on the news. Elsewhere, the FTSE 100 of leading British shares was closed for a public holiday.

In the currency markets, the euro also recovered some of its poise after falling to a three-month low against the dollar during Asian trading hours. It was up 0.4 percent at $1.3028, having earlier fallen to a low of $1.2972.

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German factory Orders have jumped higher from emerging Markets.
Merkel says the fiscal policy will not be re=negotiated, it was signed by 25 Countries and stands.
She also rejects any stimulus by the ECB and realises that the G20 and IMF will not lend any more money , neither will Germany, Finland and Sweden
contribute to bolster the EFS Fund.

A French Socialist Party Minister says Hollande will make changes and be meeting with Merkel next week, but he is not expected to waver from the need for a fiscal policy but sees grwoth as a prime consideration.

The Greek election was a two horse race but now 4 Political Parties will not have a majority and the New Democracy Party says it will honour the terms
of the IMF Agreement, some Parties want to re-negotiate. Syriza, the surprise Left Wing Party which gained 20% of the Vote says Greece has already
defaulted and all 4 Political Prties must work together to rehabilitate Greece. If , at the end of the day, there is no Political solution to present to the Greek President, another election eill have to be held.

Buik of Buik Investment Managers says let Greece fail, they will be better off. It is important the Merkel and Hollande develop a rapport.

Several rich Spanish Clients are taking their money out of Spanish Banks for fear of a run on the Banks because Spain is now in a desperate state
and will probably need a bail-out.

[frencheuropean]

[quote="jd16"]
Wasn't it Hollande who was having the affair with his secretary behind wife/partners back of his 4 kids. He wasn't honest to his wife so not showing any good traits"
..............................................................................................................................................................................
At the difference of UK, in France we are not interested in the private life of our politicians ( if they don't want the entire world to know it like Sarkozy) and I find that absolutly normal and sound.It's called respect of private life.When I am in London, I am very embarrassed when I see people nailed to pillory on the first page of tabloïds with details on their intimate life.

[Badboy]

I READ ,WAS IT HERE ON THE THREAD OR IN THE GUARDIAN THAT GERMANY SEEMS TO BE THE MAIN BENEFICITY(SP?) OF THE EURO ECONOMICALLY BECAUSE THEY ARE EXPORTING ETC

[Claudia79]

[quote="frencheuropean"]

Wasn't it Hollande who was having the affair with his secretary behind wife/partners back of his 4 kids. He wasn't honest to his wife so not showing any good traits"
..............................................................................................................................................................................
At the difference of UK, in France we are not interested in the private life of our politicians ( if they don't want the entire world to know it like Sarkozy) and I find that absolutly normal and sound.It's called respect of private life.When I am in London, I am very embarrassed when I see people nailed to pillory on the first page of tabloïds with details on their intimate life.

The same in Portugal. Thank God! This obsession with politicians intimacy makes me shiver. I want them to be competent. As for the rest, who cares?

[Angelique]

If Hollande is unable to fulfil his promises to the French people is he will suffer the same fate as Sarkozy.

With Greece once again in difficulties it seems that "austerity" is the latest dirty word so maybe the Eurozone will collapse as has been mooted!

[Panda]

High & Low Finance

In Europe, a Marriage Shows Signs of Fraying

By FLOYD NORRIS

Published: April 26, 2012








If the European monetary union is something like a bad marriage, what can be done to avoid a messy and disastrous divorce?






Paul Krugman: Death of a Fairy Tale (April 27, 2012).


Broadly speaking, there are now two prescriptions. One calls for sacrifices and compromises from all sides. The other, echoing the law that used to exist in many societies, is simple: the husband — Germany — should rule. Did not the wife promise to obey? It is too late to try to get out of that agreement.

At the heart of the euro system problem now is that most of the rest of the countries are no longer competitive with Germany. They are running large current-account deficits, and the existence of the euro means they cannot devalue their currencies to make their exports cheaper and their companies more competitive.

With no currency adjustment possible, a German central banker, Andreas Dombret, explained this week in a speech in Berlin, “other things must therefore give instead: prices, wages, employment and output.”

The question now, said Dr. Dombret, a member of the executive board of the Bundesbank, “is which countries have to shoulder the adjustment burden.”

Dr. Dombret’s answer is blunt: Not Germany.

“The deficit countries must adjust,” he said. “They must address their structural problems, reduce domestic demand, become more competitive and increase their exports.”

Suggestions that “surplus countries should shoulder at least part of the burden,” he said, simply miss the point. No one can expect Germany to do anything that might affect its competitive position relative to the United States or China, as could happen if German inflation were allowed to rise.

Until now, Germany has seemed to more or less get its way, albeit at the cost of having to put up money to avert disaster. The other Golden Rule — he who has the gold rules — has applied. Faced with German anger, and pressure from financial markets, both Greece and Italy jettisoned elected governments in favor of governments that would be run by “technocrats” who would do the right thing, as seen from Berlin. “Merkozy,” the combination of Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, dominated European summit meetings.

But now the European political winds seem to be moving against Germany. The Dutch government, which had been Germany’s staunchest ally in demanding more and more austerity from the so-called peripheral countries, found it could not get that prescription through its own Parliament. Elections are expected later this year.

More ominously from a German point of view, Mr. Sarkozy’s own future seems to be tenuous. On Sunday, he finished second in his bid for a second term, behind François Hollande, the Socialist candidate who has been calling for less austerity and more efforts to stimulate economic growth. The runoff vote will be held May 6.

Given the fact that France has its own problems, Ms. Merkel might be tempted to go it alone in ruling Europe. But as one German official told me a few months ago, France is an essential partner because of Germany’s “special history.” German domination of Europe has an unfortunate precedent.

The day after the French voted, I listened to Jens Weidmann, the president of the Bundesbank and formerly a top adviser to Ms. Merkel, speak to the Economic Club of New York and throw down the gauntlet.

Departing from his prepared text, he warned that agreements previously made must be respected, adding that the necessary fiscal union meant that some “national sovereignty” would have to be sacrificed. Mr. Hollande talks about amending Europe’s fiscal treaty mandating austerity; Dr. Weidmann views it as sacred.

The European Central Bank’s sole mandate under the law is to preserve price stability for the euro area as a whole, defined as keeping inflation under 2 percent. At the moment, with Germany doing well and much of Europe in or entering recession — and Spain being closer to a depression — there is no such thing as the euro area as a whole in any reasonable sense. But a central bank trying to live up to its mandate might focus on rampant deflation in countries being forced to slash wages and spending and decide that a little inflation elsewhere — such as in Germany — makes perfect sense.

The Germans are having none of that. “Let us say that monetary policy becomes too expansionary for Germany,” Dr. Weidmann told the Economic Club, making it clear that it is not German national sovereignty that needs to be sacrificed. “If this happens,” he said, “Germany has to deal with this using other, national instruments.” He did not specify what those instruments would be.

The idea that Germany knows best — that what is best for it is best for the euro zone as a whole — is growing less and less popular in the rest of Europe. In northern Italy, some companies are muttering about a German conspiracy to devastate the Italian economy, to enhance the prospects for German companies.

It may be significant that in the first round of the French election, extremist parties of the right and left garnered more than 30 percent of the votes, up from about 18 percent five years ago. The biggest surprise was the strength of the anti-immigrant National Front Party, which received nearly 18 percent of the votes. Both Mr. Sarkozy and Mr. Hollande wasted no time in trying to appeal to those voters. In the Netherlands, it was the defection of a right-wing, anti-immigrant party that led to the government’s collapse.


Floyd Norris comments on finance and the economy at nytimes.com/economix.








A version of this article appeared in print on April 27, 2012, on page B1 of the New York edition with the headline: In Europe, A Marriage Shows Signs Of Fraying.

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7:47pm UK, Monday May 07, 2012

Greece is in chaos after parties said they were unable to form a coalition - renewing fears Athens may default on debts and leave the eurozone.
No-one won enough votes in the weekend elections to govern alone meaning party leaders are under pressure to work together.

But the leader of the conservative New Democracy party, Antonis Samaras - who won 19% of the vote - said he was unable to form a coalition after the second placed leftwing Syriza party refused to join.

It means that public spending cuts agreed in return for bailouts from the EU, the IMF and European Central Bank, will now be difficult to implement.

In a week's time, the new Greek government is supposed to redeem 436m euros (£351m) of debt, held by private creditors who turned down a swap last month.



Alexis Tsipras' Syriza pushed Pasok into third place

It must also recapitalise Greek banks that sustained heavy losses in that swap, which cut some 106bn euros from Greece's near- and mid-term debt of more than 350bn euros.

And Greece's previous administration had already promised its EU-IMF creditors that in June it would find another 11.5bn euros ($9.3bn) in savings through 2014.

In comments widely quoted by Greek newspapers on Saturday, German finance minister Wolfgang Schaeuble said that if the new government did not meet its commitments the country would "bear the consequences".

The coalition baton has now been passed to Syriza, which won 51 seats with 16.6% of the vote.

Its leader, 38-year-old Alexis Tsipras, has three days to try to form the coalition.



Anti-immigration party Golden Dawn won seats for the first time in 40 years

If Mr Tsipras's negotiations fail, Pasok, the party that came in third in Sunday's vote, headed by former finance minister Evangelos Venizelos, will get the mandate for a further three days.

And if none of the parties can form a governing alliance, new elections will have to be called.

"There can be no government of national salvation," said Mr Tsipras.

"Signatures on the EU-IMF loan agreement are not a salvation but a tragedy," he added.

"We will exhaust all possibilities to reach an understanding, primarily with the forces of the left."

Greek markets reacted to the electoral uncertainty by closing down 6%.

The socialist Pasok party and the conservatives of New Democracy (ND) secured just 32.4% between them, down from 77.4% in 2009, according to interior ministry figures based on 95% of the vote.

More than 50% of Greeks voted for parties opposed to the cuts.

After 40 minutes of negotiations with New Democracy leader Antonis Samaras, Mr Tsipras said the two parties' views were diametrically opposed.

He demanded the cancellation of austerity measures many blame for deepening economic woes.

Mr Samaras was also meeting with the head of the former ruling party, now the third largest party, Pasok - but that meeting appears to have been unsuccessful.

New political forces in Greece include a nationalist party called Independent Greeks and the staunchly Stalinist Communist party.

The neo-Nazi Golden Dawn party is also set to enter parliament for the first time in almost 40 years.

It won 21 seats and about 7% of the popular vote, compared to less than 1% in the 2009 election

Golden Dawn's policies include placing landmines on the Turkish border to stem illegal immigration.

[jd16]

[quote="Claudia79"]

Wasn't it Hollande who was having the affair with his secretary behind wife/partners back of his 4 kids. He wasn't honest to his wife so not showing any good traits"
..............................................................................................................................................................................
At the difference of UK, in France we are not interested in the private life of our politicians ( if they don't want the entire world to know it like Sarkozy) and I find that absolutly normal and sound.It's called respect of private life.When I am in London, I am very embarrassed when I see people nailed to pillory on the first page of tabloïds with details on their intimate life.

The same in Portugal. Thank God! This obsession with politicians intimacy makes me shiver. I want them to be competent. As for the rest, who cares?

In the UK this is the power Murdoch had over our politicians. Blackmailing them with the threat of exposure of their private lives. The UK lives for sex scandals which in turn has empowered Murdoch with his comics, a really sad state of affairs. The UK public should have been more interested in what blair and new labour were doing to our country & our lives, now we are paying the price. At least in France there is a chance as the French do stand up for themselves when they are being wronged, so there is a good chance Hollande won't get away with it like blair & co

[Panda]

I agree jd16, for such a small Country, the British are inundated with Dailies who resort to salacious intrusions into people's lives to sell more Papers.
We have a quite ineffecctual PCC which condones all this and even if a reader makes a complaint, as I have they write back saying they could find nothing wrong .

You have to blame the population as well for buying the Papers.

That's why successive Governments can do what they like because the British are by and large not interested in Politics, 45% turn-out for the last
election.!!!!

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(CNN) -- The calm and cautious François Hollande, who dramatically wrested the French presidency from Nicolas Sarkozy on Sunday, faces immediate foreign policy challenges, analysts say.

Hollande strides onto the world stage with major events over upcoming days and weeks -- the Group of Eight meeting at Camp David, Maryland, and the NATO summit this month and a G-20 meeting set for Mexico City, and a European Council meeting in Brussels, Belgium, in June.

French journalist and political analyst Agnès Poirer said Hollande must meet President Barack Obama in Washington on May 17. She said in a CNN commentary that the "two men have never met and Hollande is an unknown entity in the U.S."

The rule of thumb about judging the effectiveness of a president after his or her first 100 days in office could be changed to the first "100 hours" in Hollande's case, said Heather Conley, senior fellow and director of the Center for Strategic and International Studies' Europe Program.

In a brief amount of time, Conley said, "We're going to get important insights on French directions."



The challenges that Hollande will face

Hollande: I've heard call for change

French Muslims fear anti-immigrant mood

What's next for Greek voters? Hollande became France's first Socialist president since François Mitterrand left office in 1995 as he swept to election victory over the incumbent Sarkozy, one of the most America-friendly French presidents in decades.

The result is likely to reverberate across economically hard-hit Europe. Hollande has been critical of the austerity policies central to European bailout deals for troubled economies there. But his leadership is expected to make an impact in Afghanistan as well as Turkey and the Middle East.

European markets quickly recovered from an earlier sell-off Monday following national elections in France as well as Greece that sparked concern about the future of planned austerity measures.

U.S. stocks were mixed Monday amid reignited concerns about Europe following the elections in France and Greece. The Dow Jones industrial average lost 32 points, or 0.2%, the S&P 500 shed 1 point, or 0.1%, while the Nasdaq composite rose 2 points, or 0.1%.

"A change in leadership brings uncertainty because you don't know exactly what you're getting into," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

"New leadership in France could cause investor jitters that reverberate through global financial markets."

Stephen Flanagan, the Henry A. Kissinger chair in diplomacy and national security at the Center for Strategic and International Studies, underscored the sense of uncertainty. Hollande doesn't have a "big foreign policy track record," he said.

"Hollande has been mostly a party functionary," he said.

Danielle Pletka and Gary J. Schmitt of the American Enterprise Institute wrote that Hollande's "campaign stayed away from talking about foreign policy almost altogether." Only four points of Hollande's 60-point agenda "touch on foreign affairs," they said.

"Contrary to those who believe Sarko was the George Bush of France ('dragging' Obama into Libya, taking a hard line on Iran's nuclear program), and have hopes that the long-time head of the French Socialist Party will take a severe turn to the left, Hollande is likely to disappoint," they said.

Flanagan doesn't see Hollande as being anti-American or a "difficult ally."

"I think he's going to be a little bit more cautious and circumspect about international intervention," Flanagan said.

With Sarkozy, the United States enjoyed support in its positions on Syria, Iran and Afghanistan. Sarkozy was a proponent of the NATO air campaign in Libya, but Flanagan said he's "not sure Hollande would have led the charge into Libya."

Pletka and Schmitt wrote Hollande hasn't tried to "distance himself from his predecessor's intervention in Libya or his relatively hawkish policies toward Syria and Iran."

"The one policy change Hollande is specifically committed to (and which will be most noticed by conservatives in Washington) is his pledge to withdraw all French combat troops from Afghanistan by the end of the year," they said, "This is not a radical departure from Sarkozy, who had already pledged to bring those troops home in 2013, a full year ahead of the alliance's agreement to stay until 2014."

During the campaign, Hollande also raised questions about Sarkozy's decision in 2009 to place French troops under NATO command.

Hollande can expect NATO leaders to urge him to change or soften his position when he attends the NATO summit in Chicago this month where the focus will be on Afghanistan.

But if Hollande commits to disengaging troops without a reasonable transition, "it'll make a very bad first impression with his NATO allies," Flanagan said.

Flanagan said relations between Turkey and France have been tense because Sarkozy was "dead set" against Turkey becoming a member of the European Union. He said Turks also viewed Sarkozy as supportive of legislation making the denial of the Armenian genocide a crime, a stance they vehemently opposed. Hollande is expected to be a bit more open-minded on Turkey, Flanagan said.

Marc Pierini, a former European Union career diplomat, wrote in a commentary for the Carnegie Endowment for International Peace that France also needs a "fresh start" in the Arab world.

"Hollande will now have to rebuild decent relations with largely unknown political partners -- Islamists now dominate the political game in Egypt and Tunisia for example. He will also need to work with the Arab world more through the EU framework, rather than through a strictly bilateral one, which his predecessor preferred but did not work," he said.

Pierini wrote that Hollande's "strongest cards" are his "calm, polite demeanor" and the "legitimacy deriving from his victory." Pletka and Schmitt wrote "the dry and cautious Hollande appears almost certain to pursue a dry and cautious presidency."

CNN's Hibah Yousuf, Alan Silverleib and Chelsea J. Carter contributed to this report.

[frencheuropean]

New York Times. By Paul Krugman, Nobel price of economie :


OP-ED COLUMNIST
Those Revolting Europeans
By PAUL KRUGMAN
Published: May 6, 2012


The French are revolting. The Greeks, too. And it’s about time.

Fred R. Conrad/The New York Times
Paul Krugman




Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity — and that’s a good thing.

Needless to say, that’s not what you heard from the usual suspects in the run-up to the elections. It was actually kind of funny to see the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as a figure of menace. He is “rather dangerous,” declared The Economist, which observed that he “genuinely believes in the need to create a fairer society.” Quelle horreur!

What is true is that Mr. Hollande’s victory means the end of “Merkozy,” the Franco-German axis that has enforced the austerity regime of the past two years. This would be a “dangerous” development if that strategy were working, or even had a reasonable chance of working. But it isn’t and doesn’t; it’s time to move on. Europe’s voters, it turns out, are wiser than the Continent’s best and brightest.

What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist — that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper.

Moreover, there seems to be little if any gain in return for the pain. Consider the case of Ireland, which has been a good soldier in this crisis, imposing ever-harsher austerity in an attempt to win back the favor of the bond markets. According to the prevailing orthodoxy, this should work. In fact, the will to believe is so strong that members of Europe’s policy elite keep proclaiming that Irish austerity has indeed worked, that the Irish economy has begun to recover.

But it hasn’t. And although you’d never know it from much of the press coverage, Irish borrowing costs remain much higher than those of Spain or Italy, let alone Germany. So what are the alternatives?

One answer — an answer that makes more sense than almost anyone in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe wouldn’t be in this fix if Greece still had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece and Spain would have what they now lack: a quick way to restore cost-competitiveness and boost exports, namely devaluation.

As a counterpoint to Ireland’s sad story, consider the case of Iceland, which was ground zero for the financial crisis but was able to respond by devaluing its currency, the krona (and also had the courage to let its banks fail and default on their debts). Sure enough, Iceland is experiencing the recovery Ireland was supposed to have, but hasn’t.

Yet breaking up the euro would be highly disruptive, and would also represent a huge defeat for the “European project,” the long-run effort to promote peace and democracy through closer integration. Is there another way? Yes, there is — and the Germans have shown how that way can work. Unfortunately, they don’t understand the lessons of their own experience.

Talk to German opinion leaders about the euro crisis, and they like to point out that their own economy was in the doldrums in the early years of the last decade but managed to recover. What they don’t like to acknowledge is that this recovery was driven by the emergence of a huge German trade surplus vis-à-vis other European countries — in particular, vis-à-vis the nations now in crisis — which were booming, and experiencing above-normal inflation, thanks to low interest rates. Europe’s crisis countries might be able to emulate Germany’s success if they faced a comparably favorable environment — that is, if this time it was the rest of Europe, especially Germany, that was experiencing a bit of an inflationary boom.

So Germany’s experience isn’t, as the Germans imagine, an argument for unilateral austerity in Southern Europe; it’s an argument for much more expansionary policies elsewhere, and in particular for the European Central Bank to drop its obsession with inflation and focus on growth.

The Germans, needless to say, don’t like this conclusion, nor does the leadership of the central bank. They will cling to their fantasies of prosperity through pain, and will insist that continuing with their failed strategy is the only responsible thing to do. But it seems that they will no longer have unquestioning support from the Élysée Palace. And that, believe it or not, means that both the euro and the European project now have a better chance of surviving than they did a few days ago."

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Obama telephoned Hollande last night and even though he has not been inaugurated yet he invited him to attend the G8 summit next week.

There is concern about E7 billion Greek Bonds held outside Greece by investors.

Bankia SA Chairman Rodrigo has quit , apparently over the valuation of the massive unsold Real Estate. Rodrigo is a former IMF Member and it could be to do with a potential bail-out needed by Spain. It is estimated that $50 billion is needed to clean out the problem of the Banks.

German industrial output climbs three times higher than estimates.

Teh Euro area must take pain now Dombrovskis says.

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May 2012 Last updated at 10:43 Share this pageEmail Print Share this page



Centre-left and protest parties have made gains in Italy's local elections, in a sign of widespread discontent with the government's austerity drive.

The centre-right People of Freedom (PDL) party of former Prime Minister Silvio Berlusconi did particularly badly, with most votes counted.

The protest party of comedian Beppe Grillo, called Five Star, won nearly 20% in the northern city of Parma - enough to reach the run-off vote.

Technocrats are in power centrally.

The local elections in more than 900 towns and cities are the first major political test for Mario Monti's technocratic government, which took office in November.

At the weekend, general elections in France and Greece also produced big swings to the left.

Late on Monday, the PDL, founded by Silvio Berlusconi but now run by one of his allies, was polling just 11.3% in Italy's local elections.

One of the party's MPs, former Defence Minister Ignazio La Russa, said: "We made mistakes with the candidates we put forward".

"We're obsessed with finding people who look good, without knowing whether they have any experience, while people want reliable candidates," he said, quoted by the AFP news agency.

Comedian Beppe Grillo has used social networks extensively to campaign against Italy's eurozone membership. He is well known for attacking the political establishment.

He called the vote "an epic change", in a YouTube message.

"And this is just the beginning. The parties are melting into political diarrhoea. The citizens are taking back their institutions."

In Palermo, Sicily, two centre-left candidates will go into a run-off for the mayoralty. A former mayor with a reputation for tackling the Mafia, Leoluca Orlando of the Italy of Values party, was leading with nearly 47%.

In the northern port city of Genoa, the centre-left scored nearly 49%.

The results are being watched closely because Italy is to hold national elections next year.

Polling took place over two days - Sunday and Monday - with about nine million Italians eligible to vote.

The right-wing Northern League, embroiled in a party-funding scandal involving its former leader Umberto Bossi, mostly scored poorly. But in Verona, the incumbent mayor, Flavio Tosi of the Northern League, was re-elected.

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Athens, Greece (CNN) -- Greek leftist leader Alexis Tsipras on Tuesday laid out the radical agenda he hopes to pursue if he becomes prime minister, including the cancellation of international loan agreements to Greece that forced the country into sharp budget cuts.

He also called for state control of the banks as he started efforts to form a governing coalition in the wake of parliamentary elections on Sunday.

The Greek people voted clearly to reject the austerity demanded by international lenders, Syriza Party leader Tsipras said.

The two parties that made the agreement with international lenders "don't have a majority any more to vote for the plundering and looting of the Greek people," Tsipras told lawmakers.

Tsipras met Greek President Karolos Papoulias earlier on Tuesday to get instructions to try to cobble together a government in the wake of elections that left the country's political system in chaos.

Syriza will have three days to form a government.

The party came in second place in elections where seven parties got seats in parliament and no party captured more than 19% of the vote.

The Greek stock market dropped about 5% in early trading before recovering somewhat Tuesday amid concerns that Sunday's election could prompt Greek leaders to reconsider the austerity deal. The market fell more than 6% Monday.



What's next for Greek voters?

Elections leave Greece in 'paralysis'

Europe's elections: Lesson for the U.S.?

The future of austerity in Europe Greek elections came the same day that French voters kicked out President Nicolas Sarkozy in favor of Socialist François Hollande, who spoke out against austerity in his victory speech Sunday.

Greece's main center-right party failed to form a coalition government Monday, adding yet more uncertainty to the debt-ridden country's political situation.

New Democracy leader Antonis Samaras said he did "everything possible" to form a coalition, but that none of the parties agreed to join with his party, which won first crack at forming a government after finishing first in Sunday's parliamentary elections.

Politicians have until May 17 to come up with a new working alliance or, if they cannot, set a date for another round of elections.

The leftist coalition Syriza made a strong second-place showing in the election, more than tripling its parliamentary representation to 51 seats out of 300.

Tsipras left little doubt Sunday about what direction his party would take in a new government.

"European leadership and especially (German Chancellor Angela) Merkel have to understand that austerity policies have suffered defeat," Tsipras said Sunday.

He called the election results "a message of a peaceful revolution."

Sunday's election results were widely seen as a message to politicians to back away from the harsh economic austerity measures imposed in Greece.

A European Commission spokeswoman said Monday that Greece needs time to work through its political process but reminded the country's leaders that they would be expected to abide by terms of a bailout program meant to avoid a crippling financial meltdown.

"The commission hopes and expects that the future government of Greece will respect the engagements that Greece has entered into," spokeswoman Pia Ahrenkilde Hansen told reporters.

New Democracy finished first in Sunday's voting but with just 19% of the vote, giving it 108 seats in Greece's 300-seat parliament.

Voters also delivered a rebuke to PASOK -- New Democracy's socialist partner in the outgoing coalition government -- stripping the party of 119 seats.

Together, the parties fell short of the 50% necessary to continue the coalition, requiring formation of a new government.

Last year, Greece's debt threatened to force it to drop Europe's common currency, the euro, prompting the European Central Bank and other lenders to swoop in with emergency funding. In exchange, they demanded that the government slash spending.

The resulting measures have led to tax increases and cuts in jobs, wages, pensions and benefits -- and significant public outcry.

The national unemployment rate for January, the latest month for which figures are available, was nearly 22%, prompting widespread protests and leading some young people to leave the country in search of work.

Youth unemployment is even higher than the national average of one in five out of work.

For two years, the country's massive amount of debt has threatened the stability of the 17-country eurozone.

Greece pushed through a huge debt swap in March to save it from disorderly default and clear the way for it to receive a second bailout from the European Union, the European Central Bank and the International Monetary Fund, worth €130 billion ($171.5 billion).

The debt restructuring deal gave some breathing space to the eurozone bloc, where fears that Greece might collapse had increased pressure on other debt-laden nations such as Spain and Italy.

The tribulations of New Democracy and PASOK were matched by triumphs of a number of other parties that were also-rans and in some cases nonexistent just a few years ago, propelled by voters angry about stringent austerity measures.

CNN's Antonia Mortensen and Matthew

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