Political upheaval in Europe reached a new apex over the weekend when French voters threw out their incumbent president and Greeks gave the heave-ho to the ruling parliamentary coalition. The results suggest that a new consensus is emerging in Europe in favor of more economic stimulus, but they also call into question the continent's ability to agree on a plan to keep its fiscal problems from spreading uncontrollably.
European leaders had agreed to a series of pacts that would rescue Greece and other defaulting countries in exchange for steep reductions in their red ink, while also requiring every country that relies on the euro to shrink their debts and curb deficit spending. Over the weekend, however, voters in Greece gave such large minorities in parliament to candidates from far-right and far-left parties who opposed the required spending cuts that the ruling coalition cannot continue to govern. And French voters dumped President Nicolas Sarkozy of the center-right UMP party, who'd been a key negotiator in the European rescue plans, in favor of Francois Hollande of the Socialist Party, who declared that "austerity can no longer be the only option."
The results are a sign of voters' lost patience with the entrenched leaders who presided over economies in decline, and signal an unwillingness to accept the painful choices they made. Yet neither country has much room to maneuver. Greece stands to lose its bailout if it doesn't make the promised budget cuts. And even as Hollande has questioned the emphasis on austerity, he has pledged to balanceFrance'sbudget within five years, a timetable similar to Sarkozy's. He would do so in part by imposing much higher tax rates on the wealthy.