As I opined last week the French elected Francois Hollander as president yesterday in a narrow but still convincing victory. At the same time voters in Greece turned to the left as well. However, the French results were the most important since the French economy is one of the largest in Europe and the world. Mr. Hollander is a committed socialist and has promised to stop the austerity program that was started by former president Nicolas Sarkozy. Indeed, he has promised to increase public sector spending believing that growth policies and not austerity are the way to solve the debt issues that are plaguing the European Union.
In my opinion the austerity measures proposed by many in Europe, particularly the Germans, are for the most part ill advised. The same goes for this country where the Republican mantra of deficit reduction may be a good political slogan but is bad economics. Austerity will not solve the deficit issue, but economic growth will so to the extent that Mr. Hollander seems to take this position it's a plus. However, he is an extreme leftist and my hope is that his proposed spending spree will be more moderate than what he has propose during the campaign.