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French Socialists celebrate as Greece voters reject austerity – live reaction French Socialists celebrate as Greece voters reject austerity – live reaction
(40 minutes later)
1.20pm ET/6.20pm BST: What did François Hollande promise the French to win their votes? The Economist presents a summary under the headline, "Here comes the hard part":

Most of his campaign pledges—such as a boost in welfare benefits at the start of the school year, an extra 60,000 teaching jobs, and a partial reversal of the retirement age from 62 to 60 years—involve extra spending. Yet in France public spending already accounts for 56% of GDP, and the overall tax take is also high. And the IMF is forecasting a deficit closer to 3.9% for 2013. Mr Hollande will have very little room to manoeuvre. Winning the election was one thing; the hard part is about to begin.
1.08pm ET/6.08pm BST: As an addendum to our last post, we want to direct you to Maria Margaronis' illuminating column today, "Greece takes a leap into the dark, driven by defiance and despair." Margaronis traces the old lines of division submerged beneath the weekend tallies:
As elsewhere in Europe, the draining away of the centre has revealed a jagged landscape: the shorthand of "extremes of left and right" doesn't begin to map it. The most obvious rift in Greece in the last months – a rift that's been described to me more than once as a "civil war"– has been between those who are for and against the "memorandum", the EU/IMF schedule of demands. The pro-memorandum forces want to keep Greece in the eurozone at any cost; most of their opponents also want to stay in Europe – but not of "Merkozy", austerity and the banks.
Across that rift runs an older, deeper one, whose roots go back at least as far as to the actual civil war that followed the Axis occupation, leading to 30 years in which the left was outlawed, and culminating in the neo-fascist junta of 1967 to 1974. The social and political collapse brought by the crisis has revived those memories, too, as well as old family loyalties. In the summer of 2011, when the aganaktismenoi ("outraged") of Syntagma Square briefly became the darlings of the foreign media, conservative truck drivers could rub shoulders with eco warriors and direct democracy mavens; the Greek flag could stand for self-determination as well as nationalism. But not any more.
12.55pm ET/5.55pm BST: And now, From the Comments, a call for a deeper take on the parliamentary elections in Greece:
So far we've had the French elections in great detail - locally, nationally, internationally, as it happens. Whereas the quite extraordinary results from the elections in Greece have mostly been reported from a business and economics perspective. Could we have a bit more of what's going on there socially and politically please? It seems pretty significant.
First, back to the results in Greece. Greek voters rejected the middle and went to the ends. The voters approved politicians on the far right and left who virulently opposed the deficit-reduction policies demanded by international creditors.
The conservative New Democracy party came in first but with 18.9% of the vote. The far right Chrysi Avgi (Golden Dawn), which campaigned on an anti-immigration ticket, captured 7% of the vote – enough to place 19 deputies in the 300-seat house for the first time since the collapse of military rule in 1974. Syriza, a coalition of radical left and green groups, took 16.6% of the vote – the second largest share.
What are the social and political implications of the vote? It's tempting to read such a flight to the extremes as a classic rejection of incumbency. Meaning the vote doesn't affirm anything about the electorate, apart from widespread dissatisfaction.
The Guardian's Helena Smith is in Athens:
Voters went out of their way to "punish" mainstream parties widely blamed for years of fiscal mismanagement. "How can we vote for parties to be part of the solution when they got us in this mess in the first place?" asked Poppi Stathera, a mother of two, who said she had been out of work for the past year. "We've been completely destroyed. Our country is in ruins."
The Greece election is not to be compared, however, to the usual midterm cleaning of the stables in the US Congress. The fatal riots in Greece of the last two summers raised the specter of societal collapse.
Voters may have been rejecting austerity, but there is also the sense that they were giving voice to a deep sense of insecurity – the kind of feeling that drives support to the political extremes.

Paul Krugman sees parallels with the pre-WWII era:
And since all the respectable people are inside the political tent, backing and being identified with failed policies, that means a big vote for extremists right and left.
And yes, the echoes of the 1930s are very strong.
12.22pm ET/5.22pm BST: President Obama's former chief of staff, Rahm Emanuel, now mayor of Chicago, doesn't think François Hollande is presidential material, thank you very much.12.22pm ET/5.22pm BST: President Obama's former chief of staff, Rahm Emanuel, now mayor of Chicago, doesn't think François Hollande is presidential material, thank you very much.
"To me, [Hollande] has more of the head of a prime minister than of a president," Emanuel told a group at the French ambassador's residence, according to a Libération report (quotation translated back into English from the French). Emanuel added that in his professional opinion Hollande isn't going to be able to grow into the job, either."To me, [Hollande] has more of the head of a prime minister than of a president," Emanuel told a group at the French ambassador's residence, according to a Libération report (quotation translated back into English from the French). Emanuel added that in his professional opinion Hollande isn't going to be able to grow into the job, either.
Libération also wades into one of the loonier aspects of the French election as interpreted by Americans. The paper quotes a Washington diplomat as saying that the new French president better get somebody over here pronto to explain to the American market that even though Hollande is a member of the Socialist Party, he's not actually a socialist, or at least not like that.Libération also wades into one of the loonier aspects of the French election as interpreted by Americans. The paper quotes a Washington diplomat as saying that the new French president better get somebody over here pronto to explain to the American market that even though Hollande is a member of the Socialist Party, he's not actually a socialist, or at least not like that.
"What I'd suggest to Francois Hollande is to send very quickly a representative to New York, to reassure the markets which are very nervous," the paper quotes an anonymous official as saying. "The word 'socialist' still makes investors here afraid.""What I'd suggest to Francois Hollande is to send very quickly a representative to New York, to reassure the markets which are very nervous," the paper quotes an anonymous official as saying. "The word 'socialist' still makes investors here afraid."
We're certain that President Obama – socialist-in-chief to some of his sharper critics – would love to appear with Hollande on a multi-state barnstorming tour to open a discussion with Americans about what socialism is and how neither man embodies it.We're certain that President Obama – socialist-in-chief to some of his sharper critics – would love to appear with Hollande on a multi-state barnstorming tour to open a discussion with Americans about what socialism is and how neither man embodies it.
(h/t: BuzzFeed)(h/t: BuzzFeed)
12.05pm ET/5.05pm BST: How is austerity where you live? Do you need more austerity, or less? Who has the right to impose austerity?12.05pm ET/5.05pm BST: How is austerity where you live? Do you need more austerity, or less? Who has the right to impose austerity?
My colleague Katie Rogers has a short history of how a single word came to summarize the debate over Europe's future.My colleague Katie Rogers has a short history of how a single word came to summarize the debate over Europe's future.
"Austerity" achieved the questionable honor of being Merriam-Webster's Top Word of 2010 -- runners up included "moratorium" and "socialism.""Austerity" achieved the questionable honor of being Merriam-Webster's Top Word of 2010 -- runners up included "moratorium" and "socialism."
"Austerity no longer needs to be our fate," Hollande said in his victory speech Sunday evening."Austerity no longer needs to be our fate," Hollande said in his victory speech Sunday evening.
The two main political parties in Greece are under fire, but their rejection is as much an attack on externally imposed "austerity" rules as the political status quo.The two main political parties in Greece are under fire, but their rejection is as much an attack on externally imposed "austerity" rules as the political status quo.
"We are talking about a complete collapse of the party system as we have known it, which opens up new concerns about Greece's ability to govern itself," Dimitris Keridis, professor of political science at Athens' Panteion University, told The Guardian's Helena Smith Sunday."We are talking about a complete collapse of the party system as we have known it, which opens up new concerns about Greece's ability to govern itself," Dimitris Keridis, professor of political science at Athens' Panteion University, told The Guardian's Helena Smith Sunday.
In France, eyes are locked on Germany -- specifically, Merkel's reaction to Hollande's promise to end "austerity."In France, eyes are locked on Germany -- specifically, Merkel's reaction to Hollande's promise to end "austerity."
"Perhaps the reality of the euro zone right now is that this isn't just about what Hollande does now," writes The Washington Post's Ezra Klein. "It's about what Merkel wants to do now, and what the [European Central Bank] wants to do now.""Perhaps the reality of the euro zone right now is that this isn't just about what Hollande does now," writes The Washington Post's Ezra Klein. "It's about what Merkel wants to do now, and what the [European Central Bank] wants to do now."
11.50am ET/4.50pm BST: Conservative Washington Post columnist Jennifer Rubin says the elections in France and Greece hold three lessons that spell trouble for President Obama:11.50am ET/4.50pm BST: Conservative Washington Post columnist Jennifer Rubin says the elections in France and Greece hold three lessons that spell trouble for President Obama:

First, economic non-performance by an incumbent government is not acceptable. Excuses wear thin with anxious voters.
First, economic non-performance by an incumbent government is not acceptable. Excuses wear thin with anxious voters.
Second, a failure to deal with fiscal problems early on results in economic and political crisis down the road, when the cure becomes much more extreme.Second, a failure to deal with fiscal problems early on results in economic and political crisis down the road, when the cure becomes much more extreme.
And finally, so long as governments impose anti-growth, high tax policies that impede economic vitality, incumbent governments will fail both to meet their debt obligations and satisfy popular demands for jobs and prosperity.And finally, so long as governments impose anti-growth, high tax policies that impede economic vitality, incumbent governments will fail both to meet their debt obligations and satisfy popular demands for jobs and prosperity.
Not everyone agrees that the lessons of the European elections are so obvious:Not everyone agrees that the lessons of the European elections are so obvious:
Pretending to draw lessons about America from an election in France is political amateur hourPretending to draw lessons about America from an election in France is political amateur hour
— Doug Mataconis (@dmataconis) May 7, 2012— Doug Mataconis (@dmataconis) May 7, 2012
11.40am ET/4.40pm BST: In the heady early-'90s days of Maastricht and eurozone cheerleading, a vocal minority warned that economies so vastly different could never be made to stick together in the long term.11.40am ET/4.40pm BST: In the heady early-'90s days of Maastricht and eurozone cheerleading, a vocal minority warned that economies so vastly different could never be made to stick together in the long term.
It is premature to take up the original euro criticism as having been correct. But Derek Thompson of the Atlantic is onto a chart that illustrates, somewhat mirthfully, its truth.It is premature to take up the original euro criticism as having been correct. But Derek Thompson of the Atlantic is onto a chart that illustrates, somewhat mirthfully, its truth.
The chart, by JP Morgan analyst Michael Cembalest, measures "dispersion" among economies of the euro-zone and in other monetary unions such as Gulf State GCC countries. The taller the bar, the greater the dissimilarity in member economies.The chart, by JP Morgan analyst Michael Cembalest, measures "dispersion" among economies of the euro-zone and in other monetary unions such as Gulf State GCC countries. The taller the bar, the greater the dissimilarity in member economies.
(Click here for a full-sized chart.)(Click here for a full-sized chart.)
Among these actual unions the chart mixes hypothetical unions, such as all countries falling inside the former Ottoman empire.Among these actual unions the chart mixes hypothetical unions, such as all countries falling inside the former Ottoman empire.
Guess which union is the most disparate of all? Writes Thompson:Guess which union is the most disparate of all? Writes Thompson:
"A monetary union might make more sense for every nation starting with the letter "M" than it does for the euro zone.""A monetary union might make more sense for every nation starting with the letter "M" than it does for the euro zone."
11.24am ET/4.24pm BST: Euro up, Greece down: it might be a summary of what will happen in the next year. In any case it's what happened at the close of the trading day in Europe Monday.11.24am ET/4.24pm BST: Euro up, Greece down: it might be a summary of what will happen in the next year. In any case it's what happened at the close of the trading day in Europe Monday.
Greek stocks were down 6.7 percent, on the sense that a series of carefully crafted austerity plans to deliver the country from its debt crisis were on the verge of being summarily jettisoned.

The euro, meanwhile, reversed its sharp dive to maintain parity with the dollar, the AP reports:		Greek stocks were down 6.7 percent, on the sense that a series of carefully crafted austerity plans to deliver the country from its debt crisis were on the verge of being summarily jettisoned.

The euro, meanwhile, reversed its sharp dive to maintain parity with the dollar, the AP reports:
In the currency markets, the euro recovered its poise after falling to a three-month low against the dollar during Asian trading hours. It was up 0.5 percent at $1.3040, having earlier fallen to $1.2972.In the currency markets, the euro recovered its poise after falling to a three-month low against the dollar during Asian trading hours. It was up 0.5 percent at $1.3040, having earlier fallen to $1.2972.
Earlier in Asia, Japan's Nikkei 225 index plunged 2.8 percent to close at 9,119.14 — its lowest finish in three months — with the market's export sector also sapped by a rising yen. Hong Kong's Hang Seng slid 2.6 percent to 20,536.59. In other Asia markets, Australia's S&P/ASX 200 lost 2.2 percent to 4,301.30 and South Korea's Kospi shed 1.6 percent to 1,956.44.Earlier in Asia, Japan's Nikkei 225 index plunged 2.8 percent to close at 9,119.14 — its lowest finish in three months — with the market's export sector also sapped by a rising yen. Hong Kong's Hang Seng slid 2.6 percent to 20,536.59. In other Asia markets, Australia's S&P/ASX 200 lost 2.2 percent to 4,301.30 and South Korea's Kospi shed 1.6 percent to 1,956.44.
11.15am ET/4.15pm BST: Which development will have more long-term consequences for Europe: the election of François Hollande or Greece's move for the exits of the eurozone?11.15am ET/4.15pm BST: Which development will have more long-term consequences for Europe: the election of François Hollande or Greece's move for the exits of the eurozone?
Matthew Yglesias says despite his campaign rhetoric, Hollande may find that his hands are tied if he seeks a major shift in European fiscal policy:Matthew Yglesias says despite his campaign rhetoric, Hollande may find that his hands are tied if he seeks a major shift in European fiscal policy:
All that said, when very plausible story of what happens next is simply that the European Central Bank will decide it needs to bring the continent's newest leader to heel. If the ECB signals that it will only support the French banking system and the French economy if Hollande sticks with the status quo program, then Hollande may well have no choice. Elections in Europe aren't necessarily what they used to be. Nobody's crying over Silvio Berlusconi but he was Italy's elected Prime Minister and he lost power not in an election but it a made-in-Frankfurt call by the central bank.All that said, when very plausible story of what happens next is simply that the European Central Bank will decide it needs to bring the continent's newest leader to heel. If the ECB signals that it will only support the French banking system and the French economy if Hollande sticks with the status quo program, then Hollande may well have no choice. Elections in Europe aren't necessarily what they used to be. Nobody's crying over Silvio Berlusconi but he was Italy's elected Prime Minister and he lost power not in an election but it a made-in-Frankfurt call by the central bank.
Paul Krugman sees the Greek elections as a rejection of failed incumbent officeholders, more than as a positive statement of a new political direction:Paul Krugman sees the Greek elections as a rejection of failed incumbent officeholders, more than as a positive statement of a new political direction:
Backing up a minute: I don't think you want to read European elections in terms of any particular ideological tide. This is very much a Larry Bartels world in which voters toss out incumbents and reward insurgents if the economy is bad, never mind the specifics of their platforms. Hollande's victory in France is no more a harbinger of a general leftward shift than Rajoy's victory in Spain a little while ago heralded a general rightward shift; these are just the "outs" benefiting from the fact that they aren't in, and the economy stinks.Backing up a minute: I don't think you want to read European elections in terms of any particular ideological tide. This is very much a Larry Bartels world in which voters toss out incumbents and reward insurgents if the economy is bad, never mind the specifics of their platforms. Hollande's victory in France is no more a harbinger of a general leftward shift than Rajoy's victory in Spain a little while ago heralded a general rightward shift; these are just the "outs" benefiting from the fact that they aren't in, and the economy stinks.
The Economist sees the Greek election as clearly the more substantive – not to say more ominous – development of the two:The Economist sees the Greek election as clearly the more substantive – not to say more ominous – development of the two:
The fragmentation in Greece will inevitably raise the question of whether the country will leave, or be pushed out of, the euro zone. Until now European officials have been adamant that any breach of Greece's second austerity and reform plan would lead to the halting of its rescue funds.The fragmentation in Greece will inevitably raise the question of whether the country will leave, or be pushed out of, the euro zone. Until now European officials have been adamant that any breach of Greece's second austerity and reform plan would lead to the halting of its rescue funds.
10.54am ET / 3.54pm BST: Does the potential collapse of the eurozone mean American investments are vulnerable this morning in a new way?10.54am ET / 3.54pm BST: Does the potential collapse of the eurozone mean American investments are vulnerable this morning in a new way?
There's one US investor who doesn't appear to be worried: Warren Buffett.There's one US investor who doesn't appear to be worried: Warren Buffett.
Speaking this morning to CNBC, the billionaire head of Berkshire-Hathaway said he expects Europe to steer its way out of its debt crisis, but not without some pain.Speaking this morning to CNBC, the billionaire head of Berkshire-Hathaway said he expects Europe to steer its way out of its debt crisis, but not without some pain.
The U.S. economy, in any case, is on a "different path" from Europe, with the US having already addressed insolvency in its biggest banks, Buffett told CNBC's Becky Quick.The U.S. economy, in any case, is on a "different path" from Europe, with the US having already addressed insolvency in its biggest banks, Buffett told CNBC's Becky Quick.
Buffett also spoke to the difficulty of acting in 17 countries simultaneously in Europe. The US government can – and did – come to the rescue of the big banks with little discussion outside a tight group of officials acting at the behest of a sole chief executive. Not so in Europe.Buffett also spoke to the difficulty of acting in 17 countries simultaneously in Europe. The US government can – and did – come to the rescue of the big banks with little discussion outside a tight group of officials acting at the behest of a sole chief executive. Not so in Europe.
10.45am ET/3.45pm BST: What do the developments in Europe mean for the United States? My colleague Dominic Rushe is watching the first reactions of American markets and provides a little historical context:10.45am ET/3.45pm BST: What do the developments in Europe mean for the United States? My colleague Dominic Rushe is watching the first reactions of American markets and provides a little historical context:
The US stock markets are still nonplussed by the European news. Last year the Greek debt crisis helped wipe out a spring rally in the US stock markets and investors here seemed terrified that Europe was made up of country-sized Lehman Brothers all waiting to fall like dominoes.The US stock markets are still nonplussed by the European news. Last year the Greek debt crisis helped wipe out a spring rally in the US stock markets and investors here seemed terrified that Europe was made up of country-sized Lehman Brothers all waiting to fall like dominoes.
Now everyone's favorite fact about Greece is that its economy is the same size as the Dallas-Fort Worth.Now everyone's favorite fact about Greece is that its economy is the same size as the Dallas-Fort Worth.
Big but not big enough to matter to the US economy.Big but not big enough to matter to the US economy.
Jacob Kirkegaard at the Peterson Institute wrote a great piece last week that may explain the as-yet muted reaction to the death of "Merkozy" and the electoral mess in Greece. His basic argument is that very little has really changed after the election of Hollande and that the Greeks face a dilemma that hasn't changed: agree to reform and stay in Europe or leave. And they don't want to leave.Jacob Kirkegaard at the Peterson Institute wrote a great piece last week that may explain the as-yet muted reaction to the death of "Merkozy" and the electoral mess in Greece. His basic argument is that very little has really changed after the election of Hollande and that the Greeks face a dilemma that hasn't changed: agree to reform and stay in Europe or leave. And they don't want to leave.
We caught up with Kirkegaard this morning. He said that Hollande had little real room for manoeuvre and that Greece still faced the same choice: "Do you want to stay in Europe or join the Levant?"We caught up with Kirkegaard this morning. He said that Hollande had little real room for manoeuvre and that Greece still faced the same choice: "Do you want to stay in Europe or join the Levant?"
He's betting they want to stay.He's betting they want to stay.
10am ET/3pm BST: This morning we're tracking the major rearrangements of European politics and how they might register across the globe – welcome to our live blog coverage. Tom McCarthy here in New York, and here's a summary of the latest developments:10am ET/3pm BST: This morning we're tracking the major rearrangements of European politics and how they might register across the globe – welcome to our live blog coverage. Tom McCarthy here in New York, and here's a summary of the latest developments:
• France struck out in a major new direction on Sunday, ejecting Nicolas Sarkozy from the presidency and voting in Socialist party candidate François Hollande. Hollande campaigned on a platform of promoting growth as opposed to the mere elimination of debt. He campaigned against unpopular austerity measures.• France struck out in a major new direction on Sunday, ejecting Nicolas Sarkozy from the presidency and voting in Socialist party candidate François Hollande. Hollande campaigned on a platform of promoting growth as opposed to the mere elimination of debt. He campaigned against unpopular austerity measures.
• In Greek parliamentary elections voters rejected two mainstream parties who had helped negotiate austerity plans meant to pull the country out of its debt crisis in favor of extreme candidates who echoed the popular outcry against austerity. The move cast further doubt on Greece's long-term ability to stay in the eurozone.• In Greek parliamentary elections voters rejected two mainstream parties who had helped negotiate austerity plans meant to pull the country out of its debt crisis in favor of extreme candidates who echoed the popular outcry against austerity. The move cast further doubt on Greece's long-term ability to stay in the eurozone.
• American markets reacted with indifference at the start of trading Monday, with the Dow Jones average down 0.2%. Built-in expectations of a swing away from austerity in Europe coupled with diminishing fears of a sharp new European downturn contributed to market stability.• American markets reacted with indifference at the start of trading Monday, with the Dow Jones average down 0.2%. Built-in expectations of a swing away from austerity in Europe coupled with diminishing fears of a sharp new European downturn contributed to market stability.
• Hollande's election was seen as threatening to the Franco-German co-operation on corralling European debt through tighter budgetary discipline. German chancellor Angela Merkel sought to tamp down speculation of a fracturing of European leadership. "I may say from my side that François Hollande will be welcomed with open arms here in Germany by me," Merkel said Monday. "We will work together well and intensively."• Hollande's election was seen as threatening to the Franco-German co-operation on corralling European debt through tighter budgetary discipline. German chancellor Angela Merkel sought to tamp down speculation of a fracturing of European leadership. "I may say from my side that François Hollande will be welcomed with open arms here in Germany by me," Merkel said Monday. "We will work together well and intensively."
• The euro was trading at its lowest level in months after the developments of the weekend. Markets in Europe and Asia slumped with the news.• The euro was trading at its lowest level in months after the developments of the weekend. Markets in Europe and Asia slumped with the news.