Austerity

With Francois Hollande's election as France's first Socialist president in 17 years, Europe now must deal with a major leader who has promised to push a different approach to resolving the continent's debt crisis. Hollande's message, that the German insistence on austerity must be tempered with plans to stimulate economic growth, helped propel him to a decisive win Sunday over incumbent President Nicolas Sarkozy, with nearly 52% of the vote. Hollande, 57, is expected to take over May 15 from Sarkozy, who became the first sitting French leader to lose a reelection bid in more than 30 years.

We knew it was bad, but news out from across the pond indicates that uncertainty in Europe might be slamming the economy there even more than had been thought. Revised data show that Britain's gross domestic product contracted more than previously believed in the first quarter, indicating that its economy not only entered a double-dip recession earlier this year, but that the drop was also deeper than expected. Britain's GDP fell by 0.3% in the first quarter, the Office for National Statistics said, and output in production industries fell by 0.4%.

Legend has it that when the ancient Athenians defeated the Persians here in 490 BC, a messenger named Pheidippides ran over 25 miles of rough and rocky plains to announce the victory in Athens. "We have won!" he shouted. But then, exhausted, he dropped dead. Today, deeply indebted and nearly bankrupt, Greeks fear a similar fate. It's not because they haven't held up their end of the bargain, Greeks argue, enduring a punishing course of austerity measures to fix the country's disastrous economy.

Re "True austerity," Opinion, May 18 Fiscal conservatives will always claim that the real problem is that the austerity measures undertaken in Europe didn't go far enough. Similarly, there's the claim that the reasonGeorge W. Bush, through his tax cuts and anti-regulatory stance, presided over the worst economic performance of any president in modern history was because he wasn't a true conservative. We have an obvious historical parallel. How did we finally exit the Depression?

Addressing a Congress remade by Democratic losses in the November election, President Obama on Tuesday offered a credible prescription for economic growth and a reduction in federal spending. For much of his State of the Union speech, Obama preached austerity. He called for a five-year freeze in domestic spending, but acknowledged that significant deficit reduction would require even more painful measures, such as reining in the costs of Medicare and Medicaid. It wasn't clear that austerity would extend to Social Security benefits.

In the grand global experiment now underway as countries try to cope with the economic downturn, Europe and the United States are going in opposite directions. As the Obama administration and Congress have pumped up government spending to stimulate the economy, European countries have launched austerity programs to try to bring their crushing budget deficits under control. Time will tell which economic strategy is more successful, but meanwhile, one thing is becoming clear in Western capitals from Washington to Athens: No matter what national leaders do to try to solve the crisis, they'll suffer politically.

Re "True austerity," Opinion, May 18 Fiscal conservatives will always claim that the real problem is that the austerity measures undertaken in Europe didn't go far enough. Similarly, there's the claim that the reasonGeorge W. Bush, through his tax cuts and anti-regulatory stance, presided over the worst economic performance of any president in modern history was because he wasn't a true conservative. We have an obvious historical parallel. How did we finally exit the Depression?

The runway shows at men's fashion weeks have never been about reality -- they're a form of absurdist theater and a chance to tell stories with needle and thread. Inevitably, after the metal-studded codpieces and underwear-as-outerwear have their runway moment, buyers turn out to showroom appointments to look at the real changes being announced. Herringbone in brown this season? Lapels a quarter-inch wider? Stop the presses!

Greece's Parliament on Thursday passed crucial legislation implementing unpopular austerity measures demanded by international creditors to unbolt rescue funds and ease fears of Europe's first sovereign default. The legislation, enabling swift implementation of $40 billion in budget cuts, plus a $72-billion sell-off of state assets, was backed by 155 lawmakers of the 300-member Parliament. Five abstained, four were absent and 136 lawmakers, mainly opposition conservatives, voted against the bill, the second and final piece of austerity legislation put to the test this week.

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.

BERLIN - If it seems to German Chancellor Angela Merkel that the world is against her, she may be right. Her insistence that debt-ridden European nations cut their way out of financial crises helped cost her conservative political party two state elections this month, exposed her to criticism as an inflexible taskmaster across the Eurozone and unleashed a torrent of anti-austerity venting that has toppled like-thinking national and regional leaders...

Re "Greece still in postelection impasse," May 9 Kevin Featherstone of the London School of Economics is right when he says that Greece must choose between Eurozone membership and the so-called rescue package. What Greece faces are choices offered not by Greece but by the global financial system. It set the path of recovery for Greece, a path that guarantees creditors get paid at the expense of the people of Greece. Austerity does not mean prosperity, as it is not designed for such an outcome.

The European elections have concluded and the results are clear: Voters in France and Greece are a lot smarter than economic policymakers in the United States. Or at least they're a lot more attuned to the folly of relying on austerity as a tool of economic growth. If you've missed the weekend's headlines, French voters elected their first Socialist president since Francois Mitterand left office in 1995. The new president, Francois Hollande, won after promising to loosen the reins of economic austerity and impose more sacrifices on the rich.

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.

PARIS - Exuberant supporters were still out celebrating Francois Hollande's election as president of France when the first fissures began opening up in the Franco-German motor that drives the rest of Europe. Although officials on both sides of the Rhine vowed to continue their close political cooperation, German Chancellor Angela Merkel issued a blunt rejection Monday of Hollande's pledge to renegotiate a Europe-wide fiscal treaty to rein in public debt. Nor would she countenance deficit spending to boost the economic growth that Europe so desperately needs, pouring cold water on another of Hollande's campaign promises.

With Francois Hollande's election as France's first Socialist president in 17 years, Europe now must deal with a major leader who has promised to push a different approach to resolving the continent's debt crisis. Hollande's message, that the German insistence on austerity must be tempered with plans to stimulate economic growth, helped propel him to a decisive win Sunday over incumbent President Nicolas Sarkozy, with nearly 52% of the vote. Hollande, 57, is expected to take over May 15 from Sarkozy, who became the first sitting French leader to lose a reelection bid in more than 30 years.

Under intense pressure from international lenders, Greece on Sunday announced a new set of austerity measures to meet deficit reduction targets and stamp out speculation that it would be forced out of the European single-currency zone. The measures, which include a two-year property tax, are intended to make up for revenue shortfalls that come to about $3 billion this year alone. Though designed to target mainly high earners, the new tariff could further anger the crisis-weary middle class and pose political risks for the socialist government, which repeatedly has pledged to protect Greek households from being hurt by further austerity measures.

Tens of thousands of Italians took to the streets Friday to protest public spending cuts that are part of a tide of government austerity washing over Europe. Demonstrators demanded that Prime Minister Silvio Berlusconi modify his plan to freeze public-sector salaries and slash local government funding, a tough retrenchment that he says is necessary to bring down Italy's budget deficit and bolster confidence in the battered euro. The protest came a day after hundreds of thousands of demonstrators turned out in France to denounce a move to raise the retirement age from 60 to 62. Germany, Portugal, Spain and Greece are all grappling with rising discontent over tough new public spending regimes.

Bill Clinton has some advice for Europe's leaders: Focus on stimulus, not cost cutting. The former president told a capacity crowd inside the Beverly Hilton's grand ballroom that the continent cannot rely on austerity measures to bail itself out of the debt crisis. Instead, it needs to focus on multiyear plans to boost its nations' economies. "The prescription of austerity has continued to be pushed in the face of all the evidence that it won't work," Clinton said at the Milken Institute's 2012 Global Conference.