Over the weekend, France, Greece and other European nations held elections. The message was the same everywhere: if you have been in office, the voters are booting you out. Sarkozy was ousted in France. The Greek parties that make up the "austerity" government lost huge numbers of seats. Angela Merkel's party lost in state elections. The Tories lost seats in local elections in the UK.
Most likely, it just became much more difficlut for the EU to stay in one piece. It still remains very unlikely that the EU will fall apart, however. A country like Greece may throw a tantrum, drop out of Europe and default on its bonds. Of course, that would leave Greece with no way to meet its current obligations. Germany and the rest of the EU would never underwrite the Greek efforts at that point, and Greece does not have sufficient national income to pay for even the scaled down expenditures that are currently being made by the Greek government. Strangely, pulling out of the EU would be more likely to cause a decrease in services than staying in that group.
France too will soon see a marked increase in economic difficulties. The new president is a socialist who has announced his intention to raise the tax rate on the wealthiest French to 75%. The stories are already appearing about wealthy French who are planning to move to Britain or the USA. It will be very interesting to watch what happens in Paris. The Germans will not be able to bail out France if it starts to fail; it is simply too big.
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