PARIS – The financially besieged European Union embarked on an uncertain path Tuesday, with a new president in France and a call for new elections in Greece, developments that are certain to change the way Europe handles its economic crisis.
In an expression of the uncertainty, European stock markets closed at their lowest levels of the year, while the dollar value of a euro sank to less than $1.28.
In France, Socialist Francois Hollande took his oath of office in a rainy Paris at a subdued ceremony befitting a troubled economy. Hollande’s four children and other family members were not in attendance and his personal guest list numbered only 40, in contrast to the 500 who’d been invited to the swearing-in of the last Socialist president, Francois Mitterrand, in 1981. Hollande pledged to cut the president’s pay by 30 percent.
In his inaugural address, Hollande described France’s economic situation in blunt terms: “massive debt, low growth, high unemployment, a degraded competitiveness and a Europe that is struggling to emerge from the crisis.” He pledged to spread the pain of a budget shortfall, through new taxes, from a middle class that is losing jobs to the wealthy.
“It’s time to put production before speculation, sustainable employment before quick profit,” Hollande said. “There cannot be sacrifice for some people – and even more sacrifices for those people – while there are privileges for others.”
He then flew off to Berlin for a meeting with German Chancellor Angela Merkel, whose advocacy of tough austerity measures as the way to cure Europe’s economic malaise had found a champion in Sarkozy. In contrast, Hollande has called for government spending to try to jump-start the slowing European economies.
In Berlin, Hollande proposed that both parties “put all the ideas and suggestions on the table” at a European Council scheduled for May 23, “including euro bonds, common European obligations,” which so far have been opposed by Germany. For her part, Merkel made scant mention of the differences between the two.
Meanwhile, in Greece, that country’s president gave up on his efforts to cobble together a unity government, a failure that will send Greek voters back to the polls next month in an effort to settle the country’s political morass.
No date for the new elections – the last ones were on May 6 – has been set, but the balloting must take place by mid-June – coincidentally, the deadline for the country to impose new spending cuts and taxes called for under the bailout agreement.
That timing is likely only to increase the appeal for voters of the Radical Left Coalition, whose leader, Alexis Tsirpas, has called for the country to repudiate the austerity measures.