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Yesterday, France elected Francois Hollande as its next president. As I discussed last week, I believe that this is a good thing for France and for the European economy. The incumbent, Nicholas Sarkozy, was far too committed to following German Chancellor Angela Merkel's austerity programs within the Eurozone, and austerity programs never work unless paired with growth policies. Hollande's victory, combined with the still murky results of elections in Greece, should help Europe move away from the policies that were doomed to fail.
A few observations. First and foremost, I hope that Hollande's victory will not only cause a new direction in terms of policy, but will also force Europe, and the world, to reconsider the out-sized role played by international banks and insitutions like the IMF and the World Bank, in dictating policy. Nation-states have long turned to commercial interests to bolster stability within the realm, and corporate interests have long been a junior partner, as it were, to governments in the West. It is far from clear now who is the junior partner but insofar as democracy is still one of the central foundation stones of the West, it is important to keep non-democratic actors like international banking conglomerates in check.
Second, Hollande and Merkel must now engage in an effort to sway public opinion, both within their own countries and throughout Europe. I must say that given their history, the prospect of a showdown between Paris and Berlin that entails only the mobilization of opinion, rather than armies, is a good thing.
Third, and not to be churlish about it, but as I saw the results last night, I had this immediate and dominant thought. It is always difficult to make precise analogies across time and space in politics, especially across international boundaries. Each country, especially an ancient nation like France and a still relatively new nation like the United States, is different from every other. But, I can say this: Last night, Dominique Strauss-Kahn had the almost exact same feeling that gripped Harold Ford Jr. in 2004 as he listened to then-State Senator Barack Obama deliver his keynote address to the Democratic National Convention in Boston. It is the opposite of schadenfreude yet not quite envy, entailing too much by way of circumstance to achieve the historic result, and therefore the historical analogy.
