There are many fears that France will not follow the path of austerity and budgetary rigour, should the socialist Hollande win the elections. But the harsh reality is that the colour of the elected president and his electoral programme are not so relevant. Nor does it seem likely that in the second round Sarkozy will win the support of Le Pen's extreme right-wing voters, but even if Hollande were to win the Elysée, his capacity for manoeuvre would be very, very limited.
That's right, the markets are the ones that are going to mark the way forward for the economic policies of the hyper-indebted countries. And so it should be. What many call the dictatorship of the markets is in reality a breath of lucidity - and why not say it, of global democracy - in the sea of negligence and credit dilapidation that has swept through European governments. It should not be forgotten that the European periphery, and soon France as well, is not only in debt but also in recession. And this cocktail of insolvency, together with the voluntary inability to control national monetary policy (creation of banknotes and control over interest rates), has led to an absolute loss of sovereignty, at least economic sovereignty. The creditors of this debt are the ones imposing budgetary austerity, given that Germany continues to veto the ECB's taking on the indebtedness and lack of control of the periphery. He who pays the piper calls the tune. A universal law in this system of governments without the capacity to produce banknotes.
Unless Merkel works a miracle to convince the rest of the Germans to impoverish themselves proportionally to the inanity of the peripheral accounts (including Italy, France and Spain), the separation of the Eurozone's eggs from the omelette is inevitable. What cannot be, cannot be and, moreover, is impossible. The inertia of the welfare states in the Eurozone is temporarily masking the process, but over the years the destruction of welfare and the single currency will be relentless. We have been saying this for three years now, which is an understatement, in articles such as «...".«Economic Euroscepticism«:
«As was the case with the imbalance we detected in the April 2008, the economic molecule will also tend to rebalance. That is to say, either the financing costs will come closer together again between member countries of an economically converging European Union (unlikely in our opinion); or else the differences will widen and divergence will take the Union by storm, starting with the financial part of the Union.
This scenario leads us to economic (not political) Euroscepticism, voluntary or involuntary: how long will the EU be able to keep rich and poor countries hand in hand in such a difficult environment? This global crisis that is preventing a competitive currency in an environment of “globalisation" and "globalisation".“foolish the last“It may not break the EU's political ties, but it will take away an economic union that seemed to balance the differences between countries. But it only seemed to do so. And this collapse will plunge many into misery, especially those countries that do not have the courage and/or the capacity to take such drastic and draconian measures.
“Once the impossible has been ruled out, what remains, however improbable it may seem, must be the truth“.“
Sir Arthur Conan Doyle (1859-1930)
For the time being, Hollande's opportunism continues to proclaim to voters an economic policy that panders to their ears. In a perfect if nauseating electoral manoeuvre, he says no more and no less than what the people want to hear: that the austerity imposed by Sarkozy will not be continued, and that the state will take expansive measures that will get France out of the crisis. However, the voters and the naïve politicians of their own party who believe such a discourse are missing a vitally important detail: The expansionary policy should be paid for with money that France cannot create. Moreover, the markets will soon start to penalise French sovereign debt, as they have done with Italian and Spanish sovereign debt. Because the French economy is far from growing adequately, and because forced austerity, together with the assumption of a currency tailored to the German economy, means that creditors will increasingly distrust its solvency and future prospects. A process of mistrust, growing insolvency and traumatic deleveraging that is unfortunately all too familiar in the periphery.
Both phenomena (the inability to create money and the growing mistrust of creditors) will make the economic policy sold in the French electoral pamphlet almost irrelevant. The road out of the tunnel is a single one, regardless of the colour of the government in office. And it is set by the creditors. It was high time that someone judicious took the toy of banknote creation and infinite debt out of the hands of those who are irremediably leading us to default. It was always dangerous to leave in the hands of the people the ability to make money out of nothing, and time puts everyone in their place. Some people have managed that ability better and their economies have remained productive, but it is time that others were stripped of that ability which they have recklessly wielded like an infinite Aladdin's lamp.
Sovereignty comes at a price that very few elected representatives in the Eurozone can afford to pay. The rest can deceive their electorate with ear-opening campaigns and get democratically elected, but fortunately it will no longer be possible to implement the eternally due policies that lead to collapse. The difference between a Sarkozy or a Hollande victory is that with the latter we would lose precious time, as happened with the Zapatero government in Spain or Berlusconi in Italy. Nothing more.