France Elects Socialist Hollande to Replace Sarkozy

[Conley]

French socialist Francois Hollande has won a clear victory in the country's presidential election.

Mr Hollande - who polled just under 52% of votes in Sunday's run-off - spoke of his pride at becoming president.

Admitting defeat, centre-right incumbent Nicolas Sarkozy wished "good luck" to Mr Hollande.

Analysts say the vote has wide implications for the whole eurozone. Mr Hollande has vowed to rework a deal on government debt in member countries.

Shortly after polls closed at 20:00 (18:00 GMT), French media published projections based on partial results giving Mr Hollande a lead of almost four points. Turnout was about 80%.

Jubilant Hollande supporters gathered on Place de la Bastille in Paris - a traditional rallying point of the Left - to celebrate.

People drank champagne and chanted: "Sarko, it's over!"

Mr Hollande - the first Socialist to win the French presidency since Francois Mitterrand in the 1980s - gave his victory speech in his stronghold of Tulle in central France.

He said he was "proud to have been capable of giving people hope again".

He said he would push ahead with his pledge to refocus EU fiscal efforts from austerity to "growth".

http://www.bbc.co.uk/news/world-europe-17975660

[Peter1469]

austerity to "growth" is a slogan. I have heard he wants to tax the rich at up to 75%. I wonder how he thinks that will help the economy.

[Conley]

Yes. It seems like one would have to stop the bleeding before having any chance to experience growth. The markets didn't respond favorably to this news either (not a surprise).

[Chris]

Austerity, what austerity?

Austerity Lives on in Our Minds and Hearts... (http://reason.com/blog/2012/05/07/austerity-lives-on-in-our-minds-and-hear)
...but in the numbers? Paul Krugman is thrilled that the voters of France and Greece are fighting back against "austerity." While he has plenty of words to work with, he says not a one about actual government spending figures.

Here's an OECD chart, most recent figures available as near as I can tell (if the austerity-ites have more recent ones, it would be good to use them in these discussions) which expresses European (and other) government spending in U.S. dollars (for us U.S.-bound fools), in current prices and purchasing power parity.

Just looking from 2009 to 2010--2010 being the most recent year whose figure are available for most countries--here are the EU countries that spent less in the latter year than the former: Czech Republic (by $1.4 billion), Estonia (by one hundred million), Greece (by $9.4 billion), Hungary (by $.9 billion), Iceland (by $200 million), Ireland (by $1 billion), Italy (by $8.1 billion), Portugal (by $200 million), Spain (by $5.3 billion).

Every one of those countries, though, is spending more than they spent in 2007 (and most of them more than in 2008), and quite a lot more more than in 2004.

For 2004-2010 comparison: Czech Republic is spending $12.7 billion more; Estonia $2.2 billion more; Greech $10.2 billion more; Hungary $8.2 billion more; Iceland $400 million more; Ireland $10.5 billion more; Italy $91.8 billion more; Portugal $16 billion more; Spain a whopping $113 billion more.

So in every case even any apparent "austerity" in the past couple of years is just a slight ramping down from big ramp-ups from 2004-08, approximately. A causal explanation for how and why those dips in government spending in certain countries from 2009-10 are responsible for economic crisis when far lower levels of government spending 7 years ago did not should mention this, and have more to say than "austerity bad for the economy." (The E.U.'s population growth rate has been mostly falling since 2004, though they certainly have more people total than they did then. Google magic has failed me in finding per capita government spending figure time series in the E.U. over the past decade or so, if any commenter has better luck let me know. "Expenditure on Social Protection as a Percentage of GDP" has gone up in nearly every European country from 2004 to 2009, though, according to the chart on page 6 here.)

And in the cases of Germany and France, who Krugman slams as "the Franco-German axis that has enforced the austerity regime of the past two years," Germany's 2011 spending is $26.5 billion higher than 2010 (it is one of the few country's whose 2011 figures are in the OECD chart linked above), and $268.1 billion higher than 2004. For France, its spending rose by $12.1 billion from 2009 to 2010, and by $131.3 billion from 2004 to 2010....

It's like arguing over spending cuts here that aren't spending cuts at all but minor cuts in the rate of spending increases!

[MMC]

Does he think he can just print money?

[Chris]

Show Me the ‘Savage’ Spending Cuts in Europe, Please (http://www.nationalreview.com/corner/299233/show-me-savage-spending-cuts-europe-please-veronique-de-rugy#)
Austerity is destroying Europe, we are told. In fact, this “anti-austerity” slogan was a big reason for the victory of newly elected socialist François Hollande to the presidency of France. Interviewed in The Economist a few weeks ago, Hollande’s campaign director said “We are not disciples of savage spending cuts.”

But then, I look at the data and I am asking: What “savage” spending cuts?

http://i.snag.gy/pY02T.jpg

Look at this chart. It is based on Eurostat data which you can find here. Following years of large spending increases, Spain, the United Kingdom, France, and Greece — countries widely cited for adopting austerity measures — haven’t significantly reduced spending since 2008. As you can see on this chart: These countries still spend more than pre-recession levels France and the U.K. did not cut spending. In Greece, and Spain, when spending was actually reduced — between 2009–2011 — the cuts have been relatively small compared to what is needed. Also, meaningful structural reforms were seldom implemented. As for Italy, the country reduced spending between 2009 and 2010 but the data shows and uptick in spending 2011. The increase in spending represents more than the previous reduction.

The most important point to keep in mind is that whenever cuts took place, they were always overwhelmed by large counterproductive tax increases. Unfortunately, that point is often overlooked. This approach to austerity — some spending cuts with large tax increases — is what President Obama has called the “balanced approach.”

Fiscal Austerity in Europe Doesn't Mean Large Spending Cuts (http://mercatus.org/publication/fiscal-austerity-europe-doesnt-mean-large-spending-cuts)
This version of the chart shows government spending using OECD data that is adjusted using the purchasing power parity (PPP) exchange rate.

http://i.snag.gy/rpV4g.jpg