European Elections and the Euro Part 2
Channel: Investing4Dummies
Date: 2012-05-08

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    The recent European elections held on May 6, 2012 present the potential for drastic changes in the financial landscape of the Euro, and in Europe as a whole. Pete Andresen uses graphs and experience to explain what the performance of the euro has been and why these developments are important.     

The Euro on the Edge

    This past weekend featured national elections in Europe.  The results indicate that new challenges to the Euro may emerge soon. In fact, these challenges may be greater than those posed during 2011, but so far the global financial markets appear to be largely shrugging off the implications. 

    In France, Francois Hollande was elected as the first socialist French president in 31 years. His campaign platform was composed of promises to "shift the burden of hardship to the rich" and "austerity must no longer be our fate!". In other words, he's promised to go head-to-head in opposition to German economic leadership, which has funded the vast majority of the Euro currency bailout in recent years. 

    His election suggests that the average French voter is deeply alienated and deeply antagonistic towards the ruling European elites. To some degree the election of Francois Hollande suggests that whatever these elites, including ex-French president Nicholas Sarkozy, may have done, it wasn't enough and it didn't resonate. The French voters are now apparently desperate enough to resurrect the "tax and spend" policies which failed so badly decades ago.

    German chancellor Angela Merkel has been the de-facto leader of Europe after 2008. As part of the Euro rescue package she has pledged billions of dollars worth of German loan guarantees and outright subsidies for the rest of Europe. Meanwhile...
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