Monday, May 7, 2012

Economics Round-Up


CNBC Slideshow: Europe's Real Estate Ghost Towns

Euro Tumbles Due to Wild Weekend Elections 

Anti-Austerity Ballot Backlash 

France, Greece, and the End of the Euro 
 Continued German support for the single currency relies on acceptance of the austerity imposed by the fiscal compact. Both France and Greece have now resoundingly rejected the old political consensus, making the future of the single currency more uncertain than ever.
 Greeks Reject "Barbarism" of Economic Austerity
Alexis Tsipras became the surprise package of the Greek election by telling Angela Merkel to get lost.
“The people of Europe can no longer be reconciled with the bailouts of barbarism,” Tsipras, 37, said on state-run NET TV late yesterday after his Syriza party unexpectedly came second in the country’s election. “European leaders, and especially Ms. Merkel, should realize that her policies have undergone a crushing defeat.”

Germany's Merkel Defends the Euro and Austerity
Ms Merkel has called for giving Athens time to "analyse the election result" and determine "which groupings are possible for a new government".
She acknowledged that the budget cutting imposed on the debt-mired country in exchange for two separate rescue packages was "difficult" but said it "nevertheless must continue".

Socialist Hollande Defeats Sarkozy in France
“After 35 years of politics, after 10 years at the highest levels of government, after five years as head of state, I will become a Frenchman among the French,” Sarkozy said last night, conceding defeat.
With joblessness at a 12-year high and public debt at a record, the electorate proved unwilling to forgive the 57-year- old lawyer for foibles such as celebrating his 2007 victory at a chic Paris restaurant and a holiday on a billionaire’s yacht, making the election an anti-Sarkozy vote.
“If the French had jobs and more money in their pockets, they’d be confident and ready to forgive,” said Laurent Dubois, a professor at the Institute of Political Studies in Paris.
 Austerity Could Be Over for Europe
“Immediate austerity, in recessionary economies, simply doesn’t work – a point apparently better understood by many European voters than those they have elected,” said David Kelly, chief market strategist at J.P. Morgan.
In less than two years, voters in seven European countries have thrown out leaders or ruling parties.
What Europe needs now is some “enlightened macro-economic approach,” according to Mr. Kelly. And that means less pressure on the austerity pedal, he argued.

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