François Gérard Georges Nicolas Hollande has met with Angela Dorothea Merkel in Berlin to discuss how both France and Germany can contribute to a growth strategy across the European Union. Growth is desperately needed as Greece is unable to sort out its political or economic affairs with the country going back to the polls in June. Government debt is high in Greece, Italy, Ireland, Portugal, and Belgium. As a whole, Europe owes €10,491,342,500,000 (10.49 trillion euros). Along with the anti- austerity protests in various countries around the European Union, the stakes could not be any higher.
For the people losing their jobs, defaulting on their debts and finding it difficult to make ends meet, they will be urging their political leaders to do something about the crisis. For the political nerds, this crisis is ensuring that politics remains defined as a battle between the left and the right of the political spectrum. Just when the world was coasting along with the third way, it seems like Europe has moved back to old-style politics.
Merkel, the chancellor of Germany, strongly believes in making cuts to ensure that governments can reduce their spending and the reliance on debt to finance their economies. Merkel would that, “In times like these, it is important to make sure to always stick to his own roots, values and fundamental beliefs,” and Merkel’s beliefs have been ratified in Brussels to ensure that every nation within the euro zone toes the line.
Merkel’s political party, the CDU believe in the Social Market Economy system. The CDU follows that the social market economy provides the right balance between freedom and security. It allows competition and individual responsibility, solidarity and social security. The social market economy relies on the power of freedom, entrepreneurship and motivation. At the same time we provide you with the basis for ensuring that all those in need in our society can count on support. Merkel wants this theory to be exported around the world like German cars, of course.
Hollande on the other hand firmly believes that the wealthy should shoulder the burden of austerity with tax rates up to 75% for people earning over 1,000,000 euros a year. A separation of lending and investment in the banking sector is another target, whilst building stronger Franco-German relations is an important objective as well. Hollande would say: “I am a socialist. I never liked the battles of current. I was described as a tireless researcher of syntheses. I do not deny it. Today the word is connoted, we prefer that of unanimity. The bottom line is that the meaning remains. The Socialists are only strong if they are united; the left is successful only if it agrees to take the better part of each of its components.” So the main question on everyone’s lips is how does a Socialist work with a Christian Democrat who believes in deep cuts?
Both France and Germany track their history back to the time of Charlemagne, but today both countries seem to be pulling in different directions. On the surface, the announcements state that both leaders are willing to work together to solve the crisis, they want Greece to remain in the euro zone, and both feel that growth is the main goal for Europe. Behind the façade Merkel will not budge on her commitment to austerity and Hollande will have to make a brave political decision as to whether he rolls with it or stands for his principles.
Maybe the power of polarization, reducing politics to left and right will help us all to understand the problems within the euro zone. One positive so far is that the euro has slid down against the pound and the dollar so we can all book our holidays to continental Europe for the summer, so long as the public demonstrations do not get too out of hand.