Courtesy of Mish.
All eyes are focused on the Greek election on Sunday. However, a fundamentally far more important election (for the long term) will take place in France on Saturday.
If socialists take control of both houses in French parliament as expected, president François Hollande would have free rein to carry out his stated policies such as hire more public workers, raise taxes on the rich, and Wreck France With Economically Insane Proposal: “Make Layoffs So Expensive For Companies That It’s Not Worth It”
Tensions Between France and Germany Mount
If Hollande is serious, and I think he is, France is going down the tubes fast. Moreover, the already strained relations between Hollande and German chancellor Angela Merkel mount as Merkel attacks French economy.
Deepening splits between Angela Merkel and François Hollande erupted into the open on Friday as the German chancellor attacked Paris for allowing the French economy to stall.
Mrs Merkel warned the policies of the new Socialist president could destroy the eurozone by bringing the sovereign debt crisis to France itself.
Tensions are running so high that Jean-Marc Ayrault, the French prime minister, was forced to deny that Paris had broken off the Franco-German partnership, following Berlin anger at a Franco-Italian summit in Rome on Thursday.
There was a growing sense of crisis in European capitals after David Cameron, the Prime Minister, took part in a tense conference call with Mrs Merkel, Mr Hollande and Mario Monti, the Italian prime minister.
As tensions within the eurozone deepened on Friday, the German chancellor dismissed “quick fixes” and refused to consider any discussion on pooling debt for eurobonds or Germany underwriting bank deposits in other eurozone countries.
She hit out at Mr Hollande for blocking EU supervision of national spending and supporting eurobonds, which she warned would “mask” divergences between Germany and “mediocre” or declining eurozone economies, such as that of France.
“If you look at the development of unit labour costs between Germany and France, differences have now been growing a lot more strongly, a topic that must be discussed,” Mrs Merkel said.
Merkel and former French President Nicolas Sarkozy did not see eye-to-eye on many important issues, but they did not openly feud like Hollande and Merkel. The differences between the latter pair are major in every way.
Major Differences…
