Sarkozy Out

may have been personally distasteful, I don't know a single French person who supported him, but the structural problems in France are very real and aren't going anywhere.

I wish Mr. Hollande the best of luck, but it is going to be a tough road.

On the bright side, the euro is sure to depreciate versus the dollar.
 
originally posted by VLM:
Sarkozymay have been personally distasteful, I don't know a single French person who supported him, but the structural problems in France are very real and aren't going anywhere.

I wish Mr. Hollande the best of luck, but it is going to be a tough road.

On the bright side, the euro is sure to depreciate versus the dollar.
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With the changes that have occurred in France and Greece, I'd say that the over/under line on the future of the Euro has just shrunk dramatically.

Mark Lipton
 
originally posted by MLipton:
originally posted by VLM:
Sarkozymay have been personally distasteful, I don't know a single French person who supported him, but the structural problems in France are very real and aren't going anywhere.

I wish Mr. Hollande the best of luck, but it is going to be a tough road.

On the bright side, the euro is sure to depreciate versus the dollar.
Click to expand...

With the changes that have occurred in France and Greece, I'd say that the over/under line on the future of the Euro has just shrunk dramatically.

Mark Lipton
Click to expand...

Mark, I think that overstates the downside for the Euro.

François Hollande is, I think, more deeply pro-European than Sarkozy, whose last two weeks’ chauvinistic campaign promises on strengthening borders and protection quite disgusted me. Hollande is pledged to get a European commitment to growth added to the recent German driven austerity treaty, which has been quite aptly described by Joseph Stiglitz as a “suicide pact” in its present form. He has a lot of support on this from other Euro members apart from Germany. To be sure, on the internal French economy, the promises which he has made to the French electorate smell badly of old fashioned socialist “tax and spend” and his commitment to structural reform shines by its absence, but I think that in practice he will be obliged to follow more realistic policies to avoid disaster in the markets. Let us watch developments before announcing doom for Europe.

With regard to Greece, I don’t see how they will be able to form a government committed to pro-Europe policies, so their ejection from the Euro zone and some more turbulence for the Euro zone as a whole look likely. My guess is that such turbulence is survivable and that the turmoil in Greece resulting from its ejection could bring a dose of realism those flirting with Euro exit in other countries.
 
originally posted by Tim York:

Mark, I think that overstates the downside for the Euro.

François Hollande is, I think, more deeply pro-European than Sarkozy, whose last two weeks’ chauvinistic campaign promises on strengthening borders and protection quite disgusted me. Hollande is pledged to get a European commitment to growth added to the recent German driven austerity treaty, which has been quite aptly described by Joseph Stiglitz as a “suicide pact” in its present form. He has a lot of support on this from other Euro members apart from Germany. To be sure, on the internal French economy, the promises which he has made to the French electorate smell badly of old fashioned socialist “tax and spend” and his commitment to structural reform shines by its absence, but I think that in practice he will be obliged to follow more realistic policies to avoid disaster in the markets. Let us watch developments before announcing doom for Europe.
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Tim,
You are a good deal more sanguine about the situation than I. I see in Hollande's election a deep distrust/resentment by the French electorate toward the austerity measures put into place by the Merkel/Sarko axis. Without general concord between the two major economic powers of the Euro zone, I don't see any basis for coordinated action in the near term and, without that, a much more troubled time for the Euro zone. I'd love nothing more than to be proved wrong, though.

With regard to Greece, I don’t see how they will be able to form a government committed to pro-Europe policies, so their ejection from the Euro zone and some more turbulence for the Euro zone as a whole look likely. My guess is that such turbulence is survivable and that the turmoil in Greece resulting from its ejection could bring a dose of realism those flirting with Euro exit in other countries.
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And if Greece leaves, what then becomes of Portugal and Ireland, even of Spain? It's certainly far from a foregone conclusion that the Euro zone will fail, but the chances of it happening have, in my estimation, grown in the last 24 hours.

Mark Lipton
 
originally posted by MLipton:
You are a good deal more sanguine about the situation than I. I see in Hollande's election a deep distrust/resentment by the French electorate toward the austerity measures put into place by the Merkel/Sarko axis. Without general concord between the two major economic powers of the Euro zone, I don't see any basis for coordinated action in the near term...
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Merkel will not be speaking/negotiating with the French electorate.

Much like in every country and in every election, we can expect that Hollande will not give his voters everything they want. The question of course is to what extent he will let them down.
 
originally posted by Tristan Welles:
"apart from Germany."

Well....
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Hollande is banking on a Social Democrat government coming to power in Germany in 2013. They would be more sympathetic than Merkel to his European ideas, although they would not much like his tax and spend instincts and refusal of structural reform. After all, German socialist Schröder made structural reforms of labour law.

I think that, pending that change if it happens, Hollande and Merkel will have to compromise.

It will be fascinating to see what happens.
 
originally posted by SFJoe:
originally posted by MLipton:
It's certainly far from a foregone conclusion that the Euro zone will fail, but the chances of it happening have, in my estimation, grown in the last 24 hours.
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An opposing view.
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But there's a difference between pursuing an expansionary monetary policy and lowering the retirement age and restoring the 35 hour work week.
 
I share Krugman's general view that encouraging growth is a better solution to the recession both in Europe and here. I don't share his frequently expressed belief that it would be a good thing for the Euro to fail and I don't think one has to believe one to believe in the other.

Hollande alas will not be able single-handedly to turn an austerity to a growth policy, but he's better than the alternative. The only hope for keeping Greece in the union will be considerable easing on the austerity budget requirements on them. You can hardly expect them to tolerate their current situation. I don't know if they can fall out of the Euro without further ramifications or not. One can see the argument on both sides.

Not that anyone asked me.
 
Regarde.
Quelque chose a changé.
L’air semble plus léger.
C’est indéfinissable.

Yesterday evening, I drunk with friends a Maxime Magnon Métisse 2011 and a Eric Pfifferling Pierre Chaude 2010 with antipasti homemade. Two very singing wines. And went to La Bastille "megateuf" at 10:00... It was absolutely fantastic.
pierre-alain
IMAG0180.jpg
 
originally posted by Cliff:

Do you share it?
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I buy his general macroeconomic argument about Europe. He's called it pretty well all along. I buy it in the US, too.

As for predicting the stability and membership in the Euro, it requires a sophistication about European politics that I lack.
 
And if Greece leaves, what then becomes of Portugal and Ireland, even of Spain?
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Well, they were countries before and countries again they'll be. No one is taking their sovereignty like they are now.
 
originally posted by pab:
Regarde.
Quelque chose a changé.
L’air semble plus léger.
C’est indéfinissable.

Yesterday evening, I drunk with friends a Maxime Magnon Métisse 2011 and a Eric Pfifferling Pierre Chaude 2010 with antipasti homemade. Two very singing wines. And went to La Bastille "megateuf" at 10:00... It was absolutely fantastic.
pierre-alain
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Looks like a typical night at the TGJP.
 
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