The concept of a ‘democratic deficit’ has long plagued the European Union — the EU’s history is littered with grand, transformative schemes planned by EU leaders that voters have ultimately rejected as too sweeping.  As recently as 2005, French and Dutch voters rejected the proposed EU constitution, smacking the EU elite for getting out too far in front of an electorate that clearly did not approve.

Sure enough, the story of the last three days — in the UK, in France and in Greece — will go down in EU history as a similar pivot point against German chancellor Angela Merkel’s attempt to impose strict fiscal discipline across the continent, even as additional electoral hiccups await in the North-Rhine Westphalia state elections later this week, the Irish referendum on the fiscal compact later this month and French and Dutch parliamentary elections due later this summer.

French president-elect François Hollande will now immediately become the face of the EU-wide opposition to austerity and is expected to challenge Merkel with a view that advocates more aggressive spending in a bid to balance fiscal responsibility with the promotion of economic growth — a distinct change in Franco-German relations after the ‘Merkozy’ years.  In his victory speech, Hollande called for a ‘fresh start for Europe’ and laid down his gauntlet: ‘austerity need not be Europe’s fate.’

It is an incredible turnaround from December, when Merkel and deposed French president Nicolas Sarkozy single-handedly pushed through the fiscal compact adopted by each of the EU member states (minus the UK and the Czech Republic), which would bind each member state to a budget deficit of no more than just 0.5% of GDP.  The treaty followed in the wake of the latest eurozone financial crisis last November, during which both the governments of Silvio Berlusconi in Italy and Georgios Papandreou in Greece fell, to be replaced by Berlin-approved technocratic governments, each tasked with the express purpose of making reforms to cut their governments’ respective budgets.

Continue reading Three elections — and three defeats — for EU-wide austerity →