After the recent triumph of François Hollande in France and the success of the anti austerity parties in Greece comes another major reverse for those in favour of austerity. In Angela Merkel's homeland her party, CDU has just suffered a calamitous defeat in North Rhine Westphalia, the most populous of the German Länder. Her party's vote declined by over 8%, while the main opposition party, the SPD saw their vote share rise. The SPD will now continue to run the state in coalition with the Greens, but this time with an overall majority. The photo above shows the victorious Hannelore Kraft the leader of the SPD in North Rhine Westphalia.
This result while a clear set back for Angela Merkel, does not in itself weaken her in the Federal Parliament in Berlin, where she continues to enjoy a clear majority with the support of the FDP. However it is a further indication of the strength of those opposed to further austerity. It is worth pointing out that this was not a simple anti incumbent vote as the SPD and the Greens were the governing coalition in Düsseldorf. Most of all it is further confirmation that the tide is turning in favour of concrete measures across Europe to promote growth. None of the main parties anywhere is arguing against the need to bring down national debt or to reduce excessive government deficits. But more and more political parties and groups are vociferously arguing for a longer timetable for debt and deficit reduction and the absolute need to get all European economies growing again. The situation in Spain continues to worsen with one major bank already effectively nationalised. Will Greece have a national unity government by the end of today or will there have to be fresh elections next month? Uncertainty and worry everywhere, with more and more families suffering real reductions in their living standards. Austerity is manifestly not working. This week's meeting between François Hollande and Angela Merkel may give us the first indications of whether and how far Merkel is prepared to move. Alas, we live in interesting times.