Thursday, June 7, 2012

Wisconsin Conference

Back in April, between the 2 rounds of the presidential election, I took part in a conference at the U. of Wisconsin in which I spoke about French politics and its implications for the euro. Today, over at Econbrowser, Menzie Chinn, who also participated in the conference, refers to his lecture and also gives a link to video of the whole conference. By now, the first part of my lecture is outdated, of course, since we know how the election turned out, but if you're interested, it starts at about minute 23. Menzie precedes me, George Ross follows, and then there is a question session. You can learn about the economics of the euro zone from Menzie and about the politics of the European Union from George.

Greece, Cradle of Democracy

The political debate in Greece really is heating up. Be sure to watch all the way to the end, even if it's all Greek to you:

Story here.

Fess up, François!

Le Monde thinks François Hollande isn't coming clean with the voters:
En dépit de prévisions d'une croissance du PIB faible et d'une pluie d'avertissements de la Cour des comptes, de l'inspection générale des finances ou de la Commission européenne sur le dérapage des dépenses, le gouvernement s'abrite derrière un audit sur l'état des finances publiques opportunément attendu fin juin, après les élections. En attendant, il n'annonce que des nouvelles sympathiques : hausse du smic, majoration de l'allocation de rentrée scolaire, retraite à 60 ans pour ceux qui ont travaillé jeune...
La zone euro est en feu. Non seulement ce flou persistant n'aide pas à maîtriser l'incendie, mais les électeurs français seraient en droit de connaître, au moment de retourner aux urnes, les véritables intentions du gouvernement. Le devoir de vérité incombe à la gauche comme à la droite.
But why should Hollande change what has been a winning strategy until now? Vagueness served him well in the primaries; ambiguity won the presidential election; and polling shows that evasiveness, along with a policy of announcing only good news, is winning the legislatives. So we won't really know how Hollande plans to govern before the end of June and perhaps not until the rentrée. There's just no incentive to honesty. It's a pity that Hollande's models are François Mitterrand and Jacques Delors rather than Pierre Mendès France. But then again, PMF didn't last very long as président du Conseil, did he? Honor in politics rarely translates into effectiveness, and Hollande may well have a better idea of what it will take to govern effectively than I do.


Angela Merkel has answered the call for "growth" from François Hollande, and her answer is "Nein!" Of course she also has to persuade her own opposition--SPD and Greens--that this is the correct answer, or Germany won't ratify its own fiscal pact. The SPD has decided to put the question to a party referendum. Unfortunately for Hollande, what this signifies is that there is considerable opposition within the SPD to accepting the French proposal, whose contours remain quite vague. Germany's policies have not worked out too badly for German workers--at least for the ones who are employed, as most SPD members are--so there is no groundswell of worker sentiment for greater European solidarity. The SPD leadership may be sympathetic to Hollande's position, but the leadership is not prepared to stick its neck out if the rank-and-file are prepared to lop off its head.

In short, Hollande had better have a plan B. Having said that he opposes the fiscal (Merkozy) pact as it stands, he may find himself boxed in when it is ultimately approved by Germany, as it likely will be.