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Punishing politicians for austerity

Tuesday, April 24, 2012 - 02:27

The Dutch government has resigned, France's President Nicolas Sarkozy became the only incumbent not to win the first round of the elections, and Greece is preparing to go to the polls. Analysts say Europeans have had enough of austerity and are punishing their politicians. Joanna Partridge reports.

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The stark message from one Dutch newspaper - this isn't a country anymore. That's its reaction to the surprise resignation of the Netherlands government on Monday after talks over budget cuts broke down. Until now, the Netherlands has been seen as one of the most stable euro zone members, and it had taken a tough line on "budget sinners" such as Greece. Dutch pollster Maurice de Hond warns voters are so split it may be hard to form a new government. SOUNDBITE: Maurice de Hond, Dutch pollster, saying (English): "The people with lower incomes, the ones who suffered the most from the budget cuts, they are going in the directions of, on one hand, the new Socialist party and on the other hand the PVV, the party of Wilders. Those parties are also against the bailouts, they say we don't need budget cuts up to 3 percent in 2013, as Europe demands." President Nicolas Sarkozy has returned to the campaign trail ahead of the second round of voting in the French elections. Some see his defeat by Socialist rival Francois Hollande in the first round as a rejection of his austerity measures. Justin Urquhart Stewart from Seven Investment Management expects other European governments who have implemented sharp cuts to be punished by voters who feel there's no economic recovery in sight. SOUNDBITE: Justin Urquhart Stewart, Marketing Director, Seven Investment Management, saying (English): "Politically it's going to be very difficult over the next few months, and be prepared for more of the extremes, left and right, to have a greater voice. But I suspect the reaction to that will be that finally politicians will realise that they've got to get on the front foot and be proactive and I'm sure Mrs Merkel would probably want to do that but only once the election in France is clear and then she can start making some moves." Analysts say Europeans are frustrated and want politicians to start focussing on growth rather than cuts. But all euro zone members have committed to a German-inspired pact to move towards fiscal union. Twice bailed-out Greece has been hit hardest - it's now in the fifth consecutive year of recession, as this lone protestor outside Greece's central bank can testify. The bank has just revealed that the Greek economy will contract by 5 percent this year, even more than expected. And as Greeks prepare to vote on May 6, latest polls show the two main parties in the current coalition are barely able to secure a majority in parliament. Joanna Partridge, Reuters

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Punishing politicians for austerity

Tuesday, April 24, 2012 - 02:27