Ongoing European Debt Crisis

Greek election is euro versus drachma, Samaras says, but Mario Draghi says ECB ready to act 'where needed'.

And Greeks take cash from banks ahead of key elections. Well, former PM Gordon Brown is hardly optimistic, either: Gordon Brown says France and Italy may need bailout Quote

New Democracy narrowly wins Greek Parliament

We can rest a little bit easier tonight. They've not ruled out a coaliton with Syriza, mind.

Let's just see what tomorrow brings, eh? The markets should be... interesting to watch.

Indeed. We can breathe a sigh of relief that ND are the front-runners.

We'll just have to see if they can form a coalition that can last five years.

If the second- and third-placed parties cannot do so either, then it's a third round of elections.

Even if ND can't form a coalition, I doubt that there will be a third round of elections, after the bankrupcy.

Krugman's take on this. It's still a debacle, just a slightly less politically unstable one.

I've just caught something interesting on a segment on The BBC News Channel — the uncertainty in the Eurozone is affecting growth in Britain — employers aren't taking on new people or growing their firms due to the Eurozone crisis, and they've got the money to do so.

As well, British business want investment in infrastructure — for example, more bypasses and increased capacity on roads and rail, and a third runway at Heathrow airport.

And you won't like this — Niall Ferguson: Viewpoint: Why the young should welcome austerity

edited 17th Jun '12 2:07:29 PM by Greenmantle

It amazes me how absolutely full of horse manure some supposedly erudite individuals are able to be.

There's been some speculation that France is headed for austerity, forcing them to eat some of the same medicine they (together with Germany) have been feeding the other less secure countries.

That's not gonna happen now, though. Socialists have won a majority in the French Parliament, both houses. Plus they won the Presidential election. Hollande says that France is gonna save about €4 billion per year for the next couple of years by taxing the rich, no austerity and no punishing the poor.

Here's hoping that he succeeds and that the Left movements in Europe gain momentum from this.

They've not only both houses, but a large majority of local councils. In fact, Hollande has the power to do simply everything he wants, except change the Constitution (it requires 60% of all deputies and senators to do that). So, no excuse for him if he fails. But OTOH, I prefer that situation to a cohabitation where nothing would be done at all. At least, we'll have some answers that way.

No, I'm absolutely not looking towards Capitol Hill here.

That means he's SUPREME OVERLORD of ALL FRANCE, right? Wowee. Tbh, I wish him the best of luck. As long as he does something that doesn't royally screw up the country in the long-run, I can see him being a statesmen to follow, textbook-style.

He'll probably end up doing Not Enough, which will then inevitably mean that austerians will be all like "SEE SEE WE WERE RIGHT ALL ALONG" just like with the stimulus efforts in the US.

&I have no freaking idea what he'll do or not do now. But that's true he technically has more power than anyone since de Gaulle himself, when I think about it. Of course, he'll need to deal with the ego of a lot of high-tier party members, as well as the other European countries, but let's just say Obama could only dream to be in his position right now (crisis ommited, of course).

And even better for him, the loose canon Ségolène Royal (sorry for any French fan of her, but like her or not, she's not really a great team-player when she can't be the captain) has lost her bid as a MP in a hilarious way (you know you're in France where you can see the current girlfriend of the President tweeting in support of the political opponent of the former girlfriend of the President).

edited 18th Jun '12 9:12:01 AM by RufusShinra

Well, Hollande does have to look at the bigger picture. Making the kinds of reforms he hopefully intends to make in France will likely be good for the country, but it's entirely possible for Eurozone politics to actively sabotage them. For example, if a Greek exit does contaminate the Euro sufficiently, forcing Spain and Italy to fall, it'll throw the world into a freefall that a single country's adoption of Keynesian economics won't stop.

Meh, at least, he's got a chance to do something, which is more than a lot of Western politicians get these days. Especially so as France has a way more powerful presidential function than in a lot of other democracies, IIRC (what else to expect when your Constitution was written for and by a general turned statesman when parlementary systems failed his country not once but twice - first in the infamous 1940 defeat and the whole half-decade leading to it, then in the Fourth Republic, a political wreckage making today U.S. Congress looking like an efficient, benevolent A.I.-controlled government).

edited 18th Jun '12 9:19:25 AM by RufusShinra

One thing to note here is that after Germany, France is probably the most influential country in EU politics, so having Hollande and his party in charge of the actions that France takes in the EU causes a general shift of EU policy away from austerity, especially if Hollande lets other countries do what he wants to do.

That's another interesting point. I mean, hell, Obama has been trying to convince Merkel to come around for a while. Maybe if she's surrounded by people who are tired of austerity fever-

Exactly. Now, this could probably cause a split within Europe: the austerities, led by Germany and Britain; vs the Keynsians, led by France. Hopefully, Germany (what with France being a major player in EU-27 and EA-17 politics) could probably take on-board the growth idea that Hollande is pushing. I think states are getting fed up of being fed to their electorates for mealtimes with austerity policy, and could go the Hollande route. Note, he will have to probably throw away some policies, like the 75% tax. Frankly, from an economic perspective, that's not a great thing to do.

Out of topic: the ad to the left is about the fall of Euro, saying something along the lines of: make money on Greece's exit from the Eurozone. Some times, I want to find those guys through the screen and kick their sorry as*...

Anyway: Let's also remember that Angela Merkel is in a considerably less cosy situation at home. She's losing more and more elections, and will probably get out sooner than later, so even if her country is more powerful than France on the economic and industrial side, a lot of European countries (and non-European too) could see Hollande as someone who'll have power for way longer than her in Europe, thus extending even further his influence and weight.

Edit: for the policies announced during the campaign which make him looks like the unholy son of Stalin and Mao to others, let's remember the wise words of former President Chirac: "promises only hold those who listen to them". I don't think he's stupid enough to destroy his economy with moronic actions. At least, I hope so.

edited 18th Jun '12 9:29:08 AM by RufusShinra

Indeed. However, we must remember its her party, that is in deep shit. Herself, has probably got what other centre-right European premiers crave; a party behind her, a stunning poll results from the public, and nobody hates her guts out domestically'.

edited 18th Jun '12 9:30:35 AM by Inhopelessguy

I can only agree here. After all, she's the most powerful woman in the world (sorry, Hillary, but you're behind Angela for this one). But her ability to take decisions is becoming more and more contested with her party's losses, and it will show, if it doesn't right now.

edited 18th Jun '12 9:33:38 AM by RufusShinra

Hey man, SOMEONE has to make money on the Greek's exit from the Euro.

I'd prefer it to be the Greeks, personally. Or at least anyone else than those nice and friendly speculators...

And I'd be even more delighted if Greece stayed with us.

edited 18th Jun '12 9:42:23 AM by RufusShinra

Necessarily, speculators win money and lose money. So, SOMEONE would basically be "betting on" Greece not defecting from the Euro, whereas someone else would be "betting on" them doing so, at different times.

Odds are X to Y, with X many times as large as Y, meaning that the person who's betting "no, maybe the signs aren't quite right after all-" is basically taking a huge wager because chances are they'll lose. But the people on the other side of the equation have very little to gain, because everyone knows the Greece Euro Exit is basically a done deal.

Of course, this assumes largely efficient markets, and we all know where THAT kind of thinking has gotten us.

That "efficient markets" idea misses that people are fallible and subject to the bandwagon effect, in finance as well as anywhere else.