Dutch vote in election set to be dominated by pro-European parties

Polls show Liberals and Labour ahead, dispelling concerns radical eurosceptics might gain sway in a core eurozone country

Mainstream pro-European parties look set to dominate the Dutch parliamentary election on Wednesday, dispelling concerns that radical eurosceptics might gain sway in a core eurozone country and push to quit the European Union or flout its budget rules.

But the Netherlands is likely to remain an awkward, tough-talking member of the single currency area, strongly resisting transfers to eurozone debtors, regardless of whether prime minister Mark Rutte's Liberals or the centre-left Labour party of Diederik Samsom win the most seats.

Opinion polls on Tuesday showed the Liberals and Labour on 36 seats each or the Liberals fractionally in front, with the hard-left Socialists and the far-right anti-immigration Freedom party fading in third and fourth place respectively.

That makes it more likely, though not certain, that Rutte, with the strongest international profile, will stay as prime minister.

Early morning commuters at Amsterdam's central train station were among the first to vote.

Maike Stukkeheim, an artist, said: "I had a hard time choosing who to vote for, in the end I voted Socialists. I don't particularly like them but I wanted to vote left. I think it's (the political landscape0 getting more and more rightwing, more conservative."

The final days of campaigning turned into a two-horse race between Rutte, 45, a former Unilever human resources manager dubbed the "Teflon" prime minister because of his ability to brush off disasters, and the energetic Samsom, 41, an ex-Greenpeace activist whose debating flair wowed voters.

Both parties have played down talk that they will end up in coalition, together with one or two smaller parties, but parliamentary arithmetic suggests this is the most probable outcome given a highly fragmented political landscape.

But about a fifth of the 12.5 million voters say they are undecided, leaving room for surprises.

The Netherlands is one of the few triple-A rated countries left in Europe and a longstanding ally of Germany in demanding strict adherence to fiscal discipline. The vote is seen as a barometer of northern European stamina both for austerity and for bailouts to keep the single currency bloc intact.

Thrifty Dutch taxpayers are frustrated by demands for belt-tightening at home, particularly the steady erosion of their cherished welfare state and pensions, while stumping up billions of euros to rescue what they see as profligate budget sinners.

"People have become negative about Europe because we give so much money to Greece and other countries and at the same time we are aware of the fact that we badly need money here to pay for schools, for the army and everything," Jaap Paauwe, a professor of management at Tilburg University, told Reuters.

With the focus on the eurozone crisis and its impact on the domestic economy, Europe took centre-stage during the campaign.

Employers' groups representing big businesses such as electronics giant Philips as well as small and medium-sized firms that form the backbone of the economy ran a campaign highlighting the benefits of EU membership.

The main employers' group hung a banner outside its head office in The Hague proclaiming: "Vote for Europe and your job."

In a pamphlet distributed to voters entitled "The Netherlands earns its living from Europe", business groups said the export-dependent economy would lose €90bn (£72bn) a year in sales without the euro and the EU's internal market.

In contrast, one of the biggest unions posted a cartoon on its website showing the electoral battleground as the last chance saloon with caricatures of Rutte and his allies stalking the saloon bars in the wild west.

Fears over Europe initially played in favour of the two main populist parties, particularly the Socialist party which a month ago was either leading or a close second in opinion polls.

The Socialists have waned largely because of the dismal showing of their leader Emile Roemer, a former teacher, in an almost nightly marathon of television debates.

Geert Wilders, leader of the anti-Islam Freedom party which is calling for the Netherlands to quit the euro and the EU, has also lost support.

Some of his followers are disappointed that he squandered his real power as Rutte's chief ally in parliament when he brought down the government in April by refusing to support another package of budget cuts.

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Greek Socialists Call for New Loan Terms

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Greek Socialists Call for New Loan Terms as Recession Deepens

Business Recorder (blog)

Greek Socialists Call for New Loan Terms as Recession Deepens Wall Street Journal Greek Socialists Call for New Loan Terms as Recession Deepens. Article. Email; Printer Friendly; Share: facebook ↓ More. StumbleUpon; LinkedIn; Twitter; Fark; Reddit; del.icio.us; MySpace. smaller Text larger ... New Greek Finance Minister Sworn InTIME Greek PM returns to action for bailout revisionBusiness Recorder (blog) Greece presses case to change bailout termsReuters FRANCE 24 all 215 news articles »

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François Hollande and Angela Merkel meet in Paris with high stakes at play

Franco-German discussions need to build 'a concrete path' for Europe, says José Manuel Barroso

Chancellor Angela Merkel goes to Paris on Wednesday to try to strike a Franco-German deal with President François Hollande amid deep-seated differences at what has been described as Europe's defining moment.

With the two key EU countries split for the first time in 30 months of single currency and sovereign debt crisis, José Manuel Barroso, head of the European Commission laid bare the high stakes in play at an EU summit in Brussels on Thursday as well as the high frictions between Germany and France.

Merkel's first visit to the Élysée Palace under its new occupant has been hastily arranged and comes on the eve of what is being billed as a crucial Brussels summit which, apart from the immediate financial dilemmas, is to wrestle with a radical blueprint aimed at turning the 17 countries of the eurozone into a fully-fledged political federation within a decade.

"We must articulate the vision of where Europe must go, and a concrete path for how to get there," warned Barroso. But he was unsure "whether the urgency of this is fully understood in all the capitals of the EU".

Since his election last month, France's socialist leader has quickly emerged as the most formidable challenger to German formulas for Europe's salvation after two years of Berlin largely dictating the EU response to the crisis.

Merkel is feeling bruised, having just withstood two unusual attempts by fellow leaders to ambush her and get Berlin to hand over its credit cards to write off what they see as other countries' profligacy.

In Mexico last week at the G20 and then in Rome at two bad-tempered summits in recent days, the Americans and the British – in cahoots with the leaders of France, Spain and Italy – sought to press Merkel into bankrolling fiscal stimulus and bank recapitalisation policies that would cut the vulnerable eurozone countries' cost of borrowing.

"It was all wishful thinking or a political game," said a senior EU official of the ambush attempts. "There are substantial economic and political interests at play. Governments are spinning in their respective interests."

The pressure on Merkel may have backfired and reinforced German resistance to the ideas. The view in Berlin is that Hollande will have to back down amid the relative weakness of the French economy.

The blueprint unveiled on Tuesday calls for a eurozone political federation to be built over a decade entailing four stages. The details are thin and are to be fleshed out by the end of the year by the heads of four of the main European institutions, but the proposals – a response to the Greek drama that erupted 30 months ago and which has engulfed the EU into its most perilous crisis ever – mark the most ambitious European plan since agreement on the single currency was reached at Maastricht 20 years ago.

Thursday marks the start of what will be a long, exhausting, and bruising battle essentially pitting German-led integrationist pressure against French-led protection of sovereign authority and reluctance to cede immense powers over budgets and tax-and-spend policies to Brussels and a new eurozone finance ministry, proposals that also raise fundamental questions about democratic legitimacy in the EU.

To be realised, the "political union" would require a major legal overhaul, reopening EU treaties, endless quarrels, probably a new German constitution and perhaps a referendum in Britain and its departure from the EU.

"These decisions on deeper economic, financial and fiscal integration imply major changes to the way our citizens are governed and to the way their taxes are spent," said Barroso. "This crisis is the biggest threat to all that we have achieved through European construction over the last 60 years… A big leap forward is now needed."

The proposals, likely to expose fundamental splits over Europe's future, will do little to resolve the immediate debt and currency crisis. The hope is that the medium-term master plan will placate the financial markets by demonstrating political resolve to defend the currency at all costs. The risk is that the leaders will appear so divided that the markets might step up their probing of the weaker bits of the eurozone, notably Spain and Italy.

Without a Franco-German accord, the prospects of a damaging summit in Brussels are high. Last week Hollande issued policy proposals for the summit, a growth and jobs pact whose details are anathema to Berlin – the issue of short-term shared eurozone debt leading to full pooled debt, common eurozone guarantees for bank deposits, protectionist measures favouring European manufacturers and bidders for public contracts over outsiders as well as direct eurozone recapitalisation of dodgy banks without increasing national debt levels.

The Germans feel under pressure, but Merkel will court big trouble at home if she yields. A pro-European commentator in Der Spiegel this week suggested she should sacrifice her political career to save Europe and the currency.

There is little chance of that happening. But the German elite is deeply worried about Hollande's France, because of the impact it could have on the German economy's prospects battling the emerging might of China, India or Brazil.

Berlin's angst is that Europe can only be saved and a successful Europe re-established if the two core countries are in harness, that it cannot bear the burden alone, and that if the Franco-German dynamic dissipates, the German economy will be among the biggest victims of failure.

Berlin points to the widening gap in employment costs between Germany and France; a youth unemployment rate in France triple that of Germany; Hollande's first move in reducing the retirement age and France's overall loss of competitiveness over the past decade. It fears being dragged down as a result. The cautious hope is that Hollande will turn out or be forced to be France's Gerhard Schröder, the ex-German chancellor and, like Hollande, a social democrat who executed the economic, welfare, and structural reforms a decade ago that put Germany in its current strong shape.

Hollande heads a socialist party, however, that is a lot less "modernised" than Schröder's SPD or the Labour Party under Blair and which is eternally split over Europe. Hollande's foreign minister, Laurent Fabius, spearheaded the No campaign in the French referendum that sunk the European constitution in 2005.

And the crisis is throwing into sharp relief the basic divisions, particularly on the grand plan being fought over . A crisis that started financially on the EU's periphery, in Greece, Ireland, and Portugal, has now shifted politically to the union's heart, the Berlin-Paris axis.

France may baulk at the blueprint being tabled, being deeply reluctant to surrender so much sovereign power to new eurozone authorities, while Germany will only accept the liability for others being thrust on it if the powers are federalised.

A senior EU diplomat intimately involved in the Franco-German dynamic for 20 years says, however, that Merkel and Hollande are condemned to forging a modus operandi and that the stakes are too big.

"Helmut Kohl and François Mitterrand were dreadful at the start. They hated each other. Gerhard Schröder and Jacques Chirac was the lowest I ever saw. It's always like this with France and Germany," he said.

"They always represent different positions and then they find a compromise that everyone else agrees with except the UK."

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Ian Traynor

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Hollande's pro-growth rhetoric won over France. But what about Merkel? | Jonathan Fenby

François Hollande must now find if his rhetoric can translate into a left-leaning, pro-growth agenda for the eurozone

François Hollande has been a busy man since he won the French presidency on 6 May. But he still has all to play for on the most important field – Europe – particularly after the lack of progress at his summit with the leaders of Germany, Italy and Spain in Rome on Friday.

In the past six weeks "Mr Normal" has constituted a new government, seen his Socialist party win an overall majority in legislative elections to add to its already formidable grasp on regional decision-making, journeyed to the United States to meet President Obama and join a Nato summit, gone to Mexico for the G20 meeting, and met an array of European leaders to discuss the euro crisis. All the while he has been putting through the first planks of his campaign promises, including the lowering of the pension age to 60 for some workers, a cap on earnings of bosses of state companies, and the reduction of ministerial salaries as he tries to make the fifth republic a more down-to-earth ruling system to which ordinary people can relate.

But all this is mere preamble to the new president's main task – the effort to combine renewed growth with cuts in the government deficit as the spearhead of a new European approach that will stress economic expansion rather than austerity. This week, starting with the German-French-Italian-Spanish summit in Rome, will test whether his rhetoric can be translated into a left-leaning, pro-growth agenda for the eurozone to pull it out of its seemingly endless crisis.

The new Socialist administration in Paris believes that Hollande's policies will muster a sufficient head of steam to overcome German reservations at the European summit in Brussels at the end of this month. It hails any mention of the word "growth" by leaders in other EU countries as a sign that Paris has the wind in its sails. At last, a government of the left claims to have come up with an answer to the drawn-out eurozone crisis that goes beyond belt tightening.

That sounds very attractive, especially given the way that the austerity preached from Berlin offers a bleak future for many European nations. But the room for hope looks considerably less than optimists in Paris might believe. We are not back in the heady opening months of the previous Socialist president, François Mitterrand, who declared in 1981 that there was nothing wrong with dreaming. But, as with Mitterrand, reality has a nasty way of intruding on even the most pleasant of reveries.

The decision at the Rome summit to launch a €130bn growth package consisted largely of the re-bottling of old funds in supposedly new bottles, including use of unspent budget structural funds. The post-summit press conference showed up once more the divergence between Hollande and Angela Merkel. Financial markets will not be impressed given the continuing tide of bad news.

Though coming off the heights reached last week, Spain's medium-term borrowing reached its highest level since the euro was introduced at the beginning of this century, and an audit showed that the country's banks would need up to €62bn in additional capital to meet adverse conditions. The unelected domestic political honeymoon of Mario Monti, the Italian prime minister, is over as tax increases and reductions in pensions fuel recession, and both trade unions and business are unhappy at his labour sector reforms. This makes it harder for him to push through changes while calls mount for more positive European policies to help Italy through its difficulties; and Silvio Berlusconi lobbed in a political grenade by saying that an Italian exit from the eurozone was "not blasphemy" and might not hurt the country's economy.

Above all, Merkel is resisting the growing chorus of calls for her to relax her resistance to measures that could ease the pressure on other countries to reduce their debts, and her limitation of Germany's readiness to commit itself further to bailout packages. She and Hollande have avoided an outright confrontation so far but it is difficult to see a collision being put off much further unless one or other cedes ground. Facing a federal election next year, Merkel will not wish to be seen by a suspicious German electorate as a lady ready for turning; Wolfgang Schäuble, the finance minister, took the occasion of the Rome summit to warn Greece that it must fulfil the conditions of its aid programme with no room for manoeuvre on the target of reducing debt to 120% of GDP by 2020.

As Simon Tilford notes in a report for the Centre for European Reform, Germany seems to have a sense of invulnerability amid the storms around it. "For many Germans, including many senior policymakers, the crisis seems to be someone else's problem," Tilford writes. "Merkel's obduracy is widely credited with striking a blow for Germany's national interests … This is puzzling, because Germany is much more vulnerable than German policymakers appear to believe. And Germany's strategy for dealing with the crisis is maximising, not minimising, the risks to the country's economic and political interests."

He is right, but national psychologies are difficult to shake even if Merkel was persuaded of the need to do so. Equally, with the wind of his double election victories behind him, the French leader is unlikely to be the first to blink. He knows that he courts domestic disillusion if he does so. He is the first president of the fifth republic who has inherited a political party rather than forming one in his own image, and that comes with a price in a country where many on the left (not to mention the Front National) are wary of a Europe they see as run by market-friendly bureaucrats ready to act in contravention of the democratic verdict of voters.

The trouble is that more papering over of the euro-cracks is not going to pass muster, not only with markets but also with jaundiced citizens who are realising the extent to which their leaders have failed to get to grips with the ongoing crisis. Hollande's big pro-growth story may have appeared a panacea but his policy of fiscal pumping rather than structural reform will not please the Germans and offers no longer-term solution to France's lack of competitiveness – highlighted by news that Air France-KLM (in which the state has a 16% stake) is to cut 5,000 jobs in France after losing €597m in the first quarter of this year, a harbinger of more bad tidings in a country with a 10% unemployment rate. French unions warn that 45,000 jobs in all may go in all in sectors such as steel, telecoms and automobiles.

Hollande may have won office as the prophet of expansion but his promises involve apparently irreconcilable aims. Adding to the 56% of GDP already accounted for by state spending, his pledges in areas such as education will unbalance the economy further. Hitting this year's state deficit target of 4.5% of GDP will need additional savings of €10bn, while achieving the 3% goal for 2013 will require an extra €25bn, and at a time of weak growth. Simply soaking the rich through higher taxes will not be enough. Something else will have to give.

On the European front, the Franco-German entente on which the present European framework – and the euro – was built has changed in nature as Berlin has become a political power as well as the continent's economic motor. The heritage of leadership from Paris handed down by Charles de Gaulle has evaporated. But the election of Hollande was, in part, a refusal by France's voters to submit to policies dictated from across the Rhine – even if German funding will be needed for the eurozone public works programme the new president wants, and even if the strong nationalist vote in both France's elections bodes ill for the sovereignty-surrendering fiscal union the eurozone needs to function efficiently.

Germany's policies may be what Europe should need for its long-term health, but the crisis management on offer is far more short-term. Mr Normal has to play with the hand he dealt himself, and the backing he has been receiving may end up by making Germany all the more determined to stick to its guns; the more isolated Merkel is, the more she may need to prove her determination to the electorate. The Hollande saga is, indeed, only just beginning, and its outcome is far less certain than the impressive electoral margin of victory he and his party racked up might suggest.

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Jonathan Fenby

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We are not Greece

Chicago Tribune

We are not Greece Chicago Tribune The United States is not now and will not become Greece. To the extent that the budget crisis in Europe has lessons for the United States, they go the other way. EJ Dionne: We're not GreeceWashington Post all 17 news articles »

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Greek Conservative to be Sworn in as Prime Minister

Greek Conservative to be Sworn in as Prime Minister

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Greece agrees on new government

Amid economic turmoil that threatens the entirety of Europe, country begins to from a new government.

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Greece Reaches Deal to Form Government

Pasok head Evangelos Venizelos said a deal has been reached to form a coalition government in Greece. New Democracy leader Antonis Samaras is set to be sworn in as prime minister.

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Greek parties reach deal to form a coalition government

New York Post

Greek parties reach deal to form a coalition government New York Post ATHENS -- Greece's Socialist party leader Evangelos Venizelos said Wednesday that his Pasok party, the conservative New Democracy and the Democratic ... and more »

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Greece agrees on coalition government, socialist head says

CTV.ca

Greece agrees on coalition government, socialist head says USA TODAY ATHENS, Greece (AP) – Greece has a government, the head of the country's socialist party said Wednesday, ending nearly seven weeks of political uncertainty which threatened to plunge Europe deeper into a financial crisis with global repercussions. Greece Reaches Deal to Form GovernmentWall Street Journal Greece Is Poised to Form New CoalitionNew York Times Greece has coalition government, says Pasok party chiefBBC News Fox News -Reuters -CNN all 1,382 news articles »

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Greece Has Government, Head Of Country's Socialist Party Says

ATHENS, Greece — Greece's presidency says Antonis Samaras, the head of the conservative New Democracy party that came first in Sunday's election, will soon be...

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Socialist head: Greek coalition framework set

Socialist party leader says details of three-party coalition government expected to be finalized by end of the day

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Greek parties agree new coalition

Greece has agreed a new coalition government, socialist party head and former finance minister Evangelos Venizelos announced.

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Greek socialist head: Greece has a govt, details to be worked out by ...

Sky News

Greek socialist head: Greece has a govt, details to be worked out by ... Minneapolis Star Tribune ATHENS, Greece - Greece's socialist party head and former finance minister Evangelos Venizelos says that an agreement has been reached for a coalition ... Greek Parties Race To Seal Coalition DealKL.FM 96.7 all 7 news articles »

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Greece has government, Socialist head says

Atlanta Journal Constitution

Greece has government, Socialist head says Atlanta Journal Constitution ATHENS, Greece — Greece's socialist party head and former finance minister Evangelos Venizelos says that an agreement has been reached for a coalition ...

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Greek Parties to Meet

The heads of Greece's conservative, Socialist and Democratic Left parties were expected to continue talks to seal a three-party coalition and decide on cabinet positions.

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Greek Parties to Meet on Leadership, Policies

New York Times

Greek Parties to Meet on Leadership, Policies Wall Street Journal The head of Greece's conservative party, Antonis Samaras, was due to meet his counterparts from the Socialist and Democratic Left parties in a bid to seal a ... Greek conservatives hope to seal coalition dealReuters Greek socialist party head says coalition government could be ...Washington Post Before Greek Coalition Forms, Questions About Its ResolveNew York Times CNN -TIME -Businessweek all 10,578 news articles »

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Greece inches towards a government coalition as socialist party nears a deal

Greek politicians, including New Democracy's Antonis Samaras (pictured), say they are 'hours away' from forming a pro-bailout coalition government which could ultimately save the euro.

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Mauro Guillén: Europe's Real Problem: A Deficit of Democracy

At this grave hour in which the future of Europe and that of the global economy are at stake, let's not forget that European institution-building has always been more effective when based on the national interests of the member states.