Eurowatch: A tale of two elections, and numbers

One held today [Sunday] and the second coming sometime next month.

There’s more dismal economic news, especially for Greece and Spain, and we wind up with a warning that strikes closer to home.

Merkel suffers a major setback

In another blow to Europe’s version of the Republicans, the European equivalent of the Democrat [the misnamed Social Democrats or Socialists] have won another major victory. First it was France, now it’s Germany.

From euronews:

Exit polls suggest that Germany’s Social Democrats have trounced Chancellor Angela Merkel’s centre-right party in a regional election in the country’s most populous state.

Centre-left candidate Hannelore Kraft, who together with the Greens, has run a minority government in North Rhein-Westfalia over the past two years, promised a slower reduction in public spending.

Merkel’s Christian Democrats represented by environment minister Norbert Röttgen polled its lowest ever score in the state at just 26 percent versus the Social Democrats 39 percent.

Read the rest.

More from Deutsche Welle:

The big question mark is the exact finish of the Greens. According to projections, they have finished with 11.4 percent, which would give them a slight 50.4 percent majority together with the SPD. Should the majority hold, the two parties would likely form a coalition government. This pairing governed North Rhine-Westphalia in a minority coalition for 22 months after the last elections in 2010, but snap elections were called when the regional parliament failed to pass a draft budget.

This coalition would see current state premier Hannelore Kraft retain her position.

Merkel’s coalition partners at the national level, the Free Democrats (FDP), polled better than last time with a gain of 1.8 percent, for a total of 8.5 percent.

Relative newcomers, the Pirate Party, made it into the NRW parliament for the first time, polling 7.8 percent with the biggest gain of the day, 6.2 percent.

Read the rest.

And from The Independent’s Tony Paterson:

Ms Merkel’s Christian Democrats were shell-shocked by the devastating result they returned in the poll in North Rhine Westphalia, which has a total population of 18 million. Exit polls showed that they secured a mere 25.5 per cent of the vote – their worst performance ever in the state.

Germany’s conservative Environment Minister, Norbert Röttgen, the party’s candidate in the election, had mounted a vigorous campaign centred on Ms Merkel’s austerity policies, which aimed to cut the state’s €230 billion debt.

“Today is a very bitter day,” Mr Röttgen conceded last night. “We have been clearly defeated.”

Read the rest.

And from the New York Times’ Nicholas Kulish:

The result vaults Ms. Kraft, 50, a plain-spoken politician from the industrial Ruhr Valley, into the top rank of German politicians, prompting speculation that she might be the strongest candidate to lead the party against Ms. Merkel and potentially succeed her as chancellor.

“Queen of Hearts of the S.P.D.,” read a headline on the Web site of the newspaper Die Welt, referring to the Social Democrats by the party’s German acronym. Ms. Kraft is known as being down to earth and close to the people, still living in her hometown, Mülheim. Her party hopes she can help repeat the success on the national level, to Ms. Merkel’s detriment.

Read the rest.

Whether socialists/social democrats or conservatives win, the result for voters is only a matter of degree as opposed to one of substance. Both have signed on to the neoliberal agenda, and its twin demands of austerity and financialization.

Fourth try at Greek government fails

No surprises here, with the refusal of the newly empowered Syriza coalition to sign on for a parliament charged with an austerian mandate.

The latest, from the BBC:

The leader of far-left party Syriza will not attend coalition talks on Monday, reports say, plunging Greece into further political disarray.

The move by Alexis Tsipras takes the country a step closer to elections – which polls now suggest the anti-bailout party could win.

President Karolos Papoulias had invited four parties, including Syriza, to further talks.

But Mr Tsipras on Sunday ruled out any deal with pro-bailout parties.

Both the centre-right New Democracy and the socialist Pasok have so far been unable to form a new coalition.

They both agreed to swingeing cuts in return for the last EU/IMF bailout, but suffered at last week’s polls.

Syriza, which came second, insists any new government must cancel austerity measures agreed in return for EU-IMF loans worth 130bn euros ($170bn; £105bn).

Read the rest.

So what happened at Sunday’s meeting?

While the latest poll numbers have Syriza’s numbers down from the 23.8 percent polled two days after the election, the Left coalition still polls first. New Democracy [the Republicans] polls 18.2 percent, and Pasok [the Democrats] only 12.2 percent, the lowest the party’s ever polled.

As the leader of the currently most popular party and the only one with clean hands in the financial disaster, Tsipras showed a mastery of political gamesmanship when it came to the sit-down.

From The Guardian’s Helena Smith:

On Sunday, the new political demographic was on full display. As leaders entered the room for the talks, the Syriza party head, Alexis Tsipras, assumed what some commentators described as a commanding position by choosing to sit to the left of the president, alone. His opponents, Samaras and Venizelos, sat opposite, exchanging strained smiles as the much younger Tsipras bantered in front of the cameras.

The 38-year-old leader has much to be happy – and immovable — about.


Emboldened by the ratings, Tsipras threw down the gauntlet, taunting his opponents “to go ahead” with the formation of a government. After all, he said, three parties – New Democracy, Pasok and the small pro-European Democratic Left – had agreed to participate in a coalition that would implement the unpopular policies, and with 168 MPs between them, they had a working majority.

“Those who for two years have governed us and are responsible for the situation of society and the economy have not only not got the message … they are continuing to blackmail and terrorise,” he said in a statement after the talks. “The three parties that have agreed, with the goal of implementing the memorandum,” he continued referring to the loan agreement, “have the majority. Let them go ahead. The demand that Syriza participate in their agreement is absurd. They are asking us to ignore the popular vote and our pre-elections pledges.”

But highlighting the contradictions that have also come to play in the unfolding Greek drama, an overwhelming 78.1% of Greeks also said they wanted the new government to do whatever it took to retain the euro.

Read the rest.

And the Republicans are heard from

Ekathemerini  has it:

New Democracy leader Antonis Samaras has accused the Coalition of the Radical Left (SYRIZA) of preventing an agreement to form a unity government.

Samaras made a brief statement following a 90-minute meeting with SYRIZA chief Alexis Tsipras, PASOK leader Evangelos Venizelos and President Karolos Papoulias.

“I made very effort to form a government but SYRIZA does not want to listen to the mandate from the Greek people and does not accept the formation of a viable government, nor does it accept giving its tacit support to a government that would renegotiate the [EU-IMF] memorandum,” said Samaras.

“I honestly don’t know where they are going with this,” he added.

The paper also reports the reaction of another party leader and erstwhile ally:

Democratic Left responded strongly on Sunday afternoon to statements made earlier in the day by Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras, who said after the collapse of talks for a unity government that Democratic Left has already reached an agreement with New Democracy and PASOK to support the memorandum.

“Up until yesterday, he [Tsipras] called on us to remain steadfast on our well-known position and not to participate in a government without SYRIZA. Today, after the meeting, he is saying that we have agreed with PADOK and ND for a pro-memorandum government. Shame,» Democratic Left said in a statement, adding that Tsipras «has surpassed every limit of political wretchedness.”

“His obvious inability to explain his stance does not mean he can resort to libel and lies. This is political immorality,” the statement by Democratic Left, which is led by Fotis Kouvelis concluded.

Crunching the numbers

So what are the numbers required for the austerians to prevail?

The key number to remember is 50, the number of additional parliamentary seats given to first-place party.

From the Associated Press:

The PASOK and New Democracy leaders could form a coalition with the smaller Democratic Left party of Fotis Kouvelis — combined they would have 168 seats in the 300-member parliament. . .Kouvelis’ 6.1 percent put him in a kingmaker position, with 19 seats.

But all three insist any power-sharing deal must include Syriza, led by the 38-year-old Alexis Tsipras, given its strong showing at the ballot box.

Tsipras, however, insists he cannot join or even lend his support to a government that will continue implementing the terms of Greece’s international bailout.


Papoulias’ mediation to broker a deal could in theory continue until May 17, the scheduled opening date for the new parliament, although they are expected to end sooner. If no agreement is reached, Greece will have to hold new elections next month, most likely on June 10th or 17th.

Read the rest.

We suspect that Greek politics are going to be very interesting in the weeks to come.

Debunking a Greek stereotype

One of the stereotypes about Greeks held by some in Europe’s more northern regions is similar to one long held by folks in the U.S. about Mexicans, summed up in a single adjective, lazy, applied to people of a darker hue.

California would grind to a halt without hard-working Mexican labor, and Greeks are no slouches either.

From Greek Reporter’s Marianna Tsatsou:

According to a Regus survey on the Work-Life Balance Index, Greeks appear to be the hardest workers, earning, unfortunately, less than other workers all over the world.

The financial crisis has seriously affected Greek workers. They have to deal with uncertainty in every aspect of their daily life, but they have also undertaken more duties to avoid losing their jobs. As a result, their personal and work-life balance faces problems.

The survey shows that, in comparison with 2010, Greek workers’ life has significantly deteriorated. 74% of the employees are forced to work more hours than in 2010, while workers living in other countries work on average 59% more than last year due to the crisis.

Furthermore, 82% of Greek workers have unwillingly undertaken more duties due to the same reason. High unemployment rates and the general financial instability appear to affect the psychology of Greeks, and their personal lives, in a clearly negative way.

Read the rest.

And on to Germany, and back, one item down, to Greece.

Schaeuble’s newest ambition

Already finance minister for Europe’s dominant economic power, Wolfgang Schaeuble is a man with ambitions.

From the BBC:

German Finance Minister Wolfgang Schaeuble has indicated interest in becoming chairman of the eurozone finance ministers’ regular meetings.

It is a key position that involves coordinating policy among the 17 countries that use the euro.


In the interview in the German newspaper, Welt am Sonntag, Mr Schaeuble said: “As German finance minister I already have to be strongly involved.

“So that is why I do not say that I will under no circumstance take on the chairmanship.

“And I also haven’t heard my colleagues saying: ‘Dear god, please not Schaeuble.’ So that is also not bad.

Read the rest.

His political life has just gotten a bit more interesting, given the outcome of today’s vote and its implications of tougher times ahead for Merkel.

So what’s Schaeuble saying about Greece?

He’s not only talking about Greece, he’s telling Greeks how to vote — or else!

From Athens News:

Germany is ready to consider additional measures to promote growth in Greece but agreed reforms must be carried out, German Finance Minister Wolfgang Schaeuble said in an interview with the Welt am Sonntag weekly on Saturday.

“If the Greeks have an idea of what we could do, in addition, to promote growth, we can always talk and think about this,” Schaeuble was quoted as saying. “But ultimately it is about making Greece competitive again, allowing the economy to grow and opening the path to the financial markets again.”

“That requires the agreed, fundamental reforms being carried out, otherwise the country has no prospects.”


“I can understand the Greeks well … they are suffering a lot,” said Schaeuble. “There is no comfortable path for Greece.”

“There is not a better solution. Greece must now show if it has the power to get the necessary majorities for this. I can only hope that those responsible in Greece will quickly see reason.”

Read the rest.

Growth, the mantra and the reality

To service debt, you gotta have growth, because debt accrues interest exponentially.

Government mouthpieces are spinmeisters, always adding a self-enhancing spin to their pronouncements.

A government than relies on endless growth is bound to spin things in a way to encourage people to spend and borrow: It’s not in the government’s interest to admit unvarnished truths that might lead people to conserve and seek alternatives outside the corporate/financial marketplace.

In that light, consider the latest euzozone economic predictions.

From Valentina Pop of Euobserver:

The EU commission on Friday (11 May) confirmed earlier predictions that the eurozone economy will contract by 0.3 percent this year, with worsening forecasts for Greece, Spain and the Netherlands.

In its so-called spring economic forecast, the commission expects the euro area economy to stay in a 0.3 recession this year whereas the EU as a whole will have zero-growth, as predicted in an “interim” forecast published in February.

At a press conference on Friday, EU economics commissioner Olli Rehn tried to put a positive spin on the report, saying that “recovery is in sight” as the EU is supposed to return to one-percent growth in 2013.

But the previous “autumn forecast” published only six months ago also promised growth already this year, and was sharply contradicted in most countries.

Read the rest.

And what are the numbers for Greece?

From Athens News:

The Commission said it expected Spain’s economy to contract 1.8 percent this year and a further 0.3 percent in 2013, leaving the country climbing a mountain if it is to reduce its budget deficit by a large margin and tackle 24 percent unemployment.

What’s more, the country’s major banks are in the midst of a capital restructuring that will see more than 180 billion euros of toxic assets moved into a ‘bad bank’ and potentially several dozen billion euros more.

“Spain stands out like a sore thumb,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.

“Not only does the Commission expect the recession to be more severe and protracted, the anticipated fiscal slippages are increasing, with no progress expected next year. This is the strongest indication yet that austerity is failing in Spain.”

Read the rest.

More numerical predictions

This time unemployment numbers.

From ANSAmed:

The growing employment emergency in Spain will again be under the European Union spotlight in 2013. According to estimates by the EU Commission, unemployment in Spain will reach 24.4% in 2012, rising to 25.1% next year, a quarter of the country’s workforce. The figure is more than triple the rate in 2007 (8.3%), after which the progressive rise in jobless figures began to bite: 11.3% in 2008, 18% in 2009, 20% in 2010 and 21.7% in 2011.

The figure in Greece, meanwhile, is expected to fall from 19.7% this year to 19.6% in 2013, but the country has still suffered the most rapid rise in unemployment in the EU, with the figure in 2009 standing at 9.5%, moving up to 12.6% in 2010 and 17.7% in 2011. Jobless figures in Portugal are also high, standing at 15.5% in 2012 and 15.1% in 2013.

Despite the positive progress of GDP, unemployment is also rising in France, where last year’s figure of 9.7% has grown to 10.2% this year with a forecast of 10.3% for 2013. The rise also continues in Italy, where last year’s rate stood at 7.8%, while predictions for 2012 and 2013 are of 9.8% and 9.9% respectively.

Germany, though, has again recorded a fall in jobless numbers, and is expected to drop to 5.3% in 2013, after reaching 5.5% this year and 5.9% last year.

Read the rest.

Finally, a headline from McClatchy News Service:

As Europe’s economic outlook darkens, U.S. risks grow


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