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LISBON, May 8 2012 (IPS) - I have known French president-elect Francois Hollande since the days of his predecessor and my friend Francois Mitterand. A man of broad vision, he is what France needs to pull itself out of the current crisis and put in place a policy for economic and social recovery. But his victory at the run-off election on May 6 goes far beyond this: it is a resounding confirmation of numerous signs that Europe has recognised the failure of neoliberal ideology and is changing course.

In many countries Europeans have finally seen that the austerity policies imposed to please the usurious markets are leading us down the wrong road. They have forced European countries and the euro zone into a spiral of disintegration and decline.

German chancellor Angela Merkel was constrained to see that her European partners not only resisted obeying her -this has been happening for three years- but even started to organise against her policy in an effort to end the recession, which is paralysing the real economy and favouring the virtual economy, driving unemployment to levels that are socially unacceptable.

It has become necessary to wall off this intensifying recession, which strikes one country after another. It has already moved beyond Greece, Ireland, and Portugal, the first victims of the markets and the dangerous ratings agencies. Now far larger countries like Spain, France, and Italy seem in line for the same battering, as well as small but wealthy countries like The Netherlands, whose government fell in late April. In Romania a socialist leader took charge after the previous administration lost a vote of confidence. Now Slovakia, Slovenia, the Czech Republic, and even Finland seem headed for rough waters.

In this context, with the victory of Hollande the European political pendulum seems to be swinging back towards the left.

The axis that departing president Nicolas Sarkozy forged with Merkel has fallen apart. Faced with numerous domestic problems and a growing opposition -both green and socialdemocrat- Merkel will clearly have to change her policy and come to an understanding with Hollande.

The shift that brought victory to Hollande in France did not surprise European socialists; indeed, they assumed he would win. This is clear from the “conspiracy” that took place in Rome on April 19, attended by representatives of socialist, socialdemocrat, and progressive democratic parties from across Europe who came together to analyse the situation and coordinate actions before the victory they thought near certain brought a socialist government to power in Paris.

Meanwhile, there was no relief in the European and global economic landscape. England recently entered into recession for the second time since the global crisis exploded in 2008. And according to recent statements, the chairman of the Federal Reserve, Ben Bernanke, fears that the European recession may spread to the U.S.

What a sad irony, given that the European “contagion” originated precisely in the United States, which drove the world into the headlong globalisation and the embrace of neoliberal ideology that fomented the global crisis. Thus what the U.S. now fears is a dose of its own medicine. Remember the saying: sow the wind, reap the whirlwind.

Unlike Sarkozy, Hollande had the political discernment to recognise that all countries of the euro zone depend on the future of the EU, which is the only body able to bring about a policy change at the continental level. He stated clearly that this is what is needed to prevent the European project from sliding into disintegration and irreversible decline.

It has finally been understood throughout the euro zone -including the United Kingdom- that austerity is not only a dead end; it does nothing but intensify the suffering of the weakest. Even the EU institutions have begun to understand this truth. European Council President Herman von Rompuy convened for the first time a summit meeting to fight the recession and unemployment.

Similarly, Spencer Oliver, an American and secretary-general of the Parliamentary Assembly of the Organisation for Security and Cooperation in Europe (OSCE), stated that “the financial crisis was provoked by Wall Street’s appetite for profits” and that to reverse it what is necessary, as U.S. president Barack Obama has said, is a dedicated battle against the recession and unemployment and for the social state. He added, “The financial systems, the bailouts, and the stimulus packages that cannibalised vast sums of money to save many of the very bankers who were responsible for the situation in the first place must be indicted.”

This is a time for hope, that the victory of Hollande will be the spark to change the current paradigm and put an end to the crisis. (END/COPYRIGHT IPS)

* Mario Soares is ex-president and ex-prime minister of Portugal.

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