June 20, 2012

Antonis Samaras, the leader of Greece’s conservative New Democracy Party, was sworn in as prime minister, heading a three-party coalition that is committed to upholding Greece’s bailout commitments. His New Democracy party joined forces with the leftist PASOK party and the smaller Democratic Left party. The formation of the new coalition government ended–at least for now–a protracted political crisis that threatened to plunge Europe deeper into financial chaos. New Democracy won recent parliamentary elections with 29.67 percent of the vote. The leftist Syriza party, which came in second, ran on its opposition to the terms of a bailout that kept Greece from defaulting on its national debt earlier this year. European officials had warned that failing to live up to the terms of the agreement could result in Greece’s expulsion from the eurozone.

In March, the European Union and International Monetary Fund loaned Greece 130 billion euros (172 billion dollars), but the conditions were severe. The agreed upon program of “austerity” was designed to drastically lower Greece’s national debt. This was to be accomplished by slashing public sector jobs, the minimum wage, and old-age pensions; it also called for Greece to privatize–that is, to sell off–such publicly owned assets as transportation and utility companies. According to many economists, the austerity program has, in fact, plunged Greece’s economy deeper into recession–pushing unemployment higher and depressing tax revenues. These economists also argue that austerity has dragged Greece even deeper into debt.

The Parthenon crowns Athens, the capital of Greece. (© Dagli Orti, The Art Archive)

While not rejecting the terms of the bailout, Samaras’s New Democracy party seeks to change it. However, both German Chancellor Angela Merkel and the German foreign minister have stated that the substance of the bailout agreement is “not negotiable,” though the “timeframe could be discussed.” Speaking in Athens, Greek political and economic analyst Theodore Couloumbis noted, “The crisis has been postponed, not necessarily averted. For this [latest] government to last it has to show results. You can’t continue with 50 percent youth unemployment and a fifth straight year of recession.”

Additional World Book articles:

• Bond
• Euro
• Economics 2010 (a Back in Time article)
• Economics 2011 (a Back in Time article)
• Greece 2011 (a Back in Time article)
• Crisis in the Eurozone (a special report)

June 18, 2012

Antonis Samaras, leader of Greece’s conservative New Democracy Party, met with President Karolos Papoulias today to discuss the formation of a new coalition government. New Democracy won yesterday’s parliamentary elections with 29.67 percent of the vote, guaranteeing that Greece will remain in the eurozone, at least for now. The leftist Syriza party came in second with 26.9 percent of the vote. Syriza ran on its opposition to the terms of a bailout that kept Greece from defaulting on its national debt earlier this year. European officials had warned that failing to live up to the terms of the agreement could result in Greece’s expulsion from the eurozone.

In March, the European Union and International Monetary Fund loaned Greece 130 billion euros (172 billion dollars), but the conditions were severe. The agreed upon program of “austerity” was designed to drastically lower Greece’s national debt. This was to be accomplished by slashing public sector jobs, the minimum wage, and old-age pensions; it also called for Greece to privatize–that is, to sell off–such publicly owned assets as transportation and utility companies. According to many economists, the austerity program has, in fact, plunged Greece’s economy deeper into recession–pushing unemployment higher and depressing tax revenues. These economists also argue that austerity has dragged Greece even deeper into debt.

The Parthenon crowns Athens, the capital of Greece. (© Dagli Orti, The Art Archive)

While not rejecting the terms of the bailout, Samaras’s New Democracy party seeks to change it. However, both German Chancellor Angela Merkel and the German foreign minister have stated that the substance of the bailout agreement is “not negotiable,” though the “timeframe could be discussed.”

Speaking in Athens, Greek political and economic analyst Theodore Couloumbis noted, “The crisis has been postponed, not necessarily averted. For this [latest] government to last it has to show results. You can’t continue with 50 percent youth unemployment and a fifth straight year of recession.”

Additional World Book articles:

• Bond
• Euro
• Economics 2010 (a Back in Time article)
• Economics 2011 (a Back in Time article)
• Greece 2011 (a Back in Time article)
• Crisis in the Eurozone (a special report)

May 7, 2012

Francois Hollande has won the second round of France’s May 6 presidential election. Hollande took just under 52 percent of the vote, compared with President Nicolas Sarkozy’s 48.3 percent. Sarkozy, who campaigned on a promise to reduce France’s large budget deficit, is the first president not to win a second term since Valery Giscard d’Estaing in 1981.

Francois Hollande promised to refocus the response to the eurozone debt crisis on growth and jobs rather than austerity. Austerity in some eurozone countries has involved severe budget cuts, including the elimination of many public jobs, reductions in pensions, and increases in personal taxes. Hollande instead has pledged to raise taxes on big corporations and on people earning more than 1 million euros ($1.4 million) a year. He has also proposed to raise the minimum wage, hire more teachers, and lower the retirement age from 62 to 60 for some workers. Hollande is France’s first socialist president since Francois Mitterrand, who held office between 1981 and 1995.

In parliamentary elections in Greece, also on May 6, voters turned away from the two dominant political parties, instead voting in protest for the far left and neo-Nazi right. The elections were the first public test of the European Union (EU) bailout of Greece’s national debt and the subsequent austerity program that Greece was forced to adopt. Analysts noted that the outcome was clear–a complete rejection of that agreement.

Member nations of the European Union (EU).

The euro is used by 17 member nations of the European Union. European Central Bank

While Mr. Hollande has said that he intends to give “a new direction to Europe”–specifically  instituting measures to stimulate economic growth–German Chancellor Angela Merkel made plain today that she was not open to renegotiating Europe’s current program of austerity. “I may say from my side that Francois Hollande will be welcomed with open arms here in Germany by me,” stated the chancellor at a press conference in Berlin. “We will work together well and intensively.”  However, Merkel insisted that the fiscal pact she negotiated with President  Sarkozy and endorsed by 25 EU member nations is “not negotiable.”

Additional World Book articles:

• Crisis in the Eurozone (a special report)
• Economics 2011 (Back in Time article)
• France 1958 (Back in Time article)
• France 2011 (Back in Time article)
• Greece 2009 (Back in Time article)
• Greece 2010 (Back in Time article)
• Greece 2011 (Back in Time article)

April 23, 2012

Socialist Francois Hollande received the most votes in France’s presidential election on April 22, forcing a second-round run-off on May 6. Hollande took 28.5 percent of the vote, compared with President Nicolas Sarkozy’s 27.1 percent. Far-right candidate Marine Le Pen won 18.2 percent of the vote, with the rest divided among seven other candidates. French political experts described Le Pen’s vote as “a stunning result for the far right.” (They regard her National Front party as anti-establishment, anti-European Union (EU), and anti-immigrant; critics accuse the party of inciting Islamophobia.) The election was the first in which a French president running for re-election failed to win the first round since the start of the Fifth Republic in 1958.

President Sarkozy campaigned on a promise to reduce France’s large budget deficit and to tax people who leave the country for tax reasons. He has also threatened to pull out of the EU passport-free zone unless other member countries do more to curb immigration from non-European countries. If Sarkozy loses the run-off, he will become the first president not to win a second term since Valery Giscard d’Estaing in 1981.

Nicolas Sarkozy (© Thibault Camus, AFP/Getty Images)

Francois Hollande wishes to refocus the response to the eurozone debt crisis on growth and jobs rather than austerity. He has promised to raise taxes on big corporations and on people earning more than 1 million euros ($1.4 million) a year. He also proposes to raise the minimum wage, hire more teachers, and lower the retirement age from 62 to 60 for some workers. If elected, Hollande would be France’s first left wing president since Francois Mitterrand, who held office between 1981 and 1995.

Additional World Book articles:

• De Gaul, Charles
• Left wing
• Right wing
• Crisis in the Eurozone (a special report)
• Economics 2011 (Back in Time article)
• France 1958 (Back in Time article)
• France 2011 (Back in Time article)