Saturday, March 10, 2012

The potential for an alternative to the Merkozy way (Part1)

The need for a 2/3 majority in both houses of the German parliament which became known last Saturday and the potential power it gives to the SPD and the Greens, have altered the potential for an alternative to the Merkozy way. In a more positive way that before.

Before, a win by Francois Hollande on May 6 in France, would be the beginning of a comeback of the progressive political and social forces in the EU, the Eurozone and the Europlus.

Since the need for 2/3 majority to adopt the Fiscal Compact has arisen, there is potential for more than that. Today, Saturday (March 10) Reuters reports: German SPD wants concessions for backing fiscal pact

One of the questions that arise is: Is the SPD waiting for the May 6 result in France to determine its exact stance on the Fiscal Compact?


Well, according to The Guardian's "Left, right, left: how political shifts have altered the map of Europe" graph, on March 10, only 5 governments or government coalitions in the EU are characterised as  "left wing", 2 (Greece and Italy) as "neutral" and the rest, ie 20 as "right wing".

Those 5 are: Denmark, Belgium, Austria, Slovenia and Cyprus,
 The Slovak elections today seems that it will add one more to the 5.

Thus of the 25 that  have signed the Fiscal Compact, 17 are conservatives, 2 technocratic and 6 progressive.
Among the Eurozone 17, the split is 10, 2, 5.

So at this time, is there enough potential for a change of political momentum, against the Merkozy way and in favour of a more "balanced" and less austerity-obsessed way?

Well, among the 25, the split is heavily in favour of the conservatives, 17-6,  thus a rejection of the Fiscal Compact in Germany would provide major political embarrassment for Merkel, kill the plan but not pave the way for an alternative plan.

Yet on May 7, if France "goes Socialist" ob May 6, and with the problems already in Spain and potentially in The Netherlands, there may be enough momentum for a radical amendment to the Fiscal Compact, more radical than today. Maybe a new Pact altogether, with less hardcore fiscal austerity and much more keynesian.

Now, if Sarkozy emerges victorious on May 6, austerity and fiscal compact will have won a major battle. The SPD and Greens will still be able to get some offsets for adopting the compact but the compact will go through, since even an Irish No in theory does not prevent a majority of the members to adopt the compact. Of course those who turn it down, will not have access to bail outs etc.

Complicated, huh? Not a dull moment in EU Affairs!

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