Sunday the 6th of May 2012 might become a significant date in European politics. The Greek election results and above all the election of Francois Hollande as new French President might be the start of political change in Europe. I (and others on SEJ) have argued for a long time that the Angela Merkel driven European strategy is bound to fail. It has strangled economic recovery in Europe and now the predictable political feedback has started to materialise.
Europe is a strange place in these days. There is no crisis mood in Germany as most people still believe – led by politics and some part of the media – that all problems are exclusively due to the action of foreign governments in the European periphery. There is also a lack of understanding of macroeconomic interconnectedness and how the rapid economic decline of more and more parts of the Eurozone is bound to hit Germany too sooner rather than later. On the other hand, the crisis experience in southern Europe is leading more and more people into desperation and populist right and left wing fringe parties are having a ball.
It is high time that a workable solution to the Eurozone crisis is elaborated and yesterday’s elections hopefully create a momentum that can be channelled into a new policy dynamic. Above all, we need a detailed plan for growth and jobs, ways to finance the necessary investments and how these investments can strategically position the Eurozone economy for the new global economy that is taking shape. These are issues SEJ will deal with in the coming months.
In the meantime, I think there is still a big problem with the crisis diagnosis. I recently gave a talk at a conference in Manchester on the issue. Find the video below in case you are interested…