In Europe, voters have chosen growth over austerity and this has implications for the U.S. economy and sustainable development. The Greek and French electorate’s rejection of austerity will have a dramatic effect on European spending, including investments in sustainability. These changes can also be expected to reverberate across the Atlantic.
In France, Francois Hollande’s presidential victory has derailed Nicholas Sarkozy's austerity policies and in Greece, the parties supporting the international rescue package have lost control of parliament. In both countries, voters decisively said no to austerity and yes to growth.
France and Greece choose growth over austerity
Both France and Greece appear to be doing a 180 on austerity. Hollande has been critical of the austerity policies central to European bailout deals. He promises to ease austerity measures and increase taxation on the wealthy. Hollande has pledged to renegotiate the European fiscal pact that was signed in December 2011 and he wants to issue common European bonds to finance growth through investment in sectors like renewable energy.
Investment in renewable energy is only one of several commitments that have pleased France’s Green Party (which received 2 percent of the French vote). During the campaign, Hollande promised to diversify France's energy, including promises to cut the country’s nuclear dependence in half by 2025. He also vowed to increase renewable energy and respect France's international engagements to reduce greenhouse gas (GHG) emissions. This will help France reach and perhaps even surpass its EU-backed sustainability goals of 20 percent by 2020. Greenpeace France notes that the newly elected President of France has called for the EU to increase its GHG emissions target to 30 percent by 2020.
Prior to the election, France’s right leaning Sarkozy government was criticized for doing little for the environment. In an October, 2011 article published in the French daily Le Monde, MPs from the “ecological” wing of the Socialist party derided the center-right’s environmental record. They chided the “environmental passivity of the right” saying that after 10 years of leadership, “France invests nine times less than Germany and five times less than China in clean energy.” They further drew attention to the fact that there are no French businesses among the top 10 producers of wind turbines or photovoltaic panels. They also pointed out that in terms of wind production per inhabitant, France was in thirteenth place in Europe and the country had no offshore wind developments.
The fate of Greece is much less certain. The results of Greek parliamentary elections are inconclusive, fueling fear that Greece will become the first developed nation to default on its debt.
If a coalition government cannot be formed, Greece will go back to the voters some time in June, but this will be too late for the bailout package being offered by the EU. If Greek political leaders cannot form a government, the country will default on its debt and cease to be part of the EU. This will have a calamitous impact on the economy of the entire continent and the wider world. Whatever the future holds, it is now clear that Greeks have refused austerity.
All of this intrigue takes place just ahead of the Rio+20 conference, which will take place on June 20 – 22, 2012. This is the fourth major summit on sustainable development since 1972. The summit brings together at least 100 global leaders and 50,000 participants from around the world, including corporate executives and representatives of various social movements. Participants will focus on growth, and address specific concerns as they relate to oceans, food, energy, biodiversity and climate. The summit aims to find ways to support sustainable development.
U.N. Secretary General Bank Ki Moon wants to bring sustainable energy to even the most remote corners of the planet and 3,000 scientists will present a new science for Planet Earth at Rio 20 known as the State of the Planet Declaration.
However, some of Europe’s key players will not be attending the Rio Conference. German Chancellor Angela Merkel will not attend nor will British Prime Minister David Cameron. Despite rearranging the summit's dates so they would not coincide with Queen Elizabeth II's Diamond Jubilee celebrations, Cameron announced he will not be attending Rio. US President Barack Obama is also likely to stay on the campaign trail rather than go to Rio.
Whatever happens in Rio, the elections in Europe have changed the political map and this has implications for the forthcoming American election.
Sustainable development in America
Austerity in Europe was not good for the growth of sustainability or the American economy and social unrest born of economic hardship compounded the problem. The end of austerity is good news for advocates of sustainable development and those who want to see more growth in the American economy.
In Europe, government investment to stimulate growth will benefit the American economy. It may also make it easier for the Obama administration to increase its commitment to sustainable development. As should be obvious to all with even a passing interest in American politics, when it comes to sustainable development, the Democrats are the only game in town.
Republican presidential candidate Mitt Romney has an economic strategy that has austerity at its heart. Events in Europe may encourage Americans to question the Republican vision for America. According to the European narrative, spending cuts further slow the economy and actually increase debt. This puts Republicans squarely at odds with the new economics sweeping across Europe.
As stated by Richard Eskow, a senior fellow at the liberal Campaign for America’s Future, this should bode well for the Democrats:
“This should be the Democrats’ moment, a time to make political gains in the most honorable way possible: by fighting for what’s right. Today’s radical Republicans want to destroy government and slash the very spending that’s needed to rescue the economy. The GOP is even rejecting the common sense spending on roads and bridges embraced by past Republicans from Dwight D. Eisenhower to George W. Bush. As austerity measures eviscerate Europe’s economy and undermine the political popularity of its leadership, this should be the Democrats’ finest hour. Unfortunately, too many Democratic leaders have preferred to echo the austerity rhetoric of their Republican opponents — and of Europe’s embattled leaders. The president’s last debt deal with John Boehner was a milder version of European austerity, and it slowed our country’s tentative growth. And yet he’s reportedly pushing for another “Grand Bargain,” leaving him with a muddled economic message, and Americans in a prolonged state of fear.”
There is reason to believe that Americans may support government spending at least until there is stronger growth and more jobs. Americans may very well follow the French and the Greeks who have chosen to abandon austerity in favor of growth.
The near term fate of sustainable development hinges on governments adopting a policy of growth rather than a policy focused on austerity.
Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.