The Week that Was: Europe.

Last week was an ominous one for Europe.

Nicolas Sarkozy, junior partner of the Merkozy two-headed monster, seems set to lose the Presidency. After appealing (April 25) to a National Front audience of poor white voters ("Être traité de fasciste par un communiste, c'est un honneur!"; "To be called fascist by a communist, it's an honor!" My translation), Monsieur le Président ruled out any deal with far-right National Front (April 27).

Suggested slogan for M. Sarkozy's campaign:
Voter pour moi, pauv'con. [A]

The symbolism of Sarkozy's statement is hard to overstate: April 26 was the 75th anniversary of the bombing of the basque town of Guernica (north of Spain), by a combined Nazi-Fascist taskforce.

Acting in support of their local puppet, Francisco Franco, the German Legion Condor and the Italian Legionary Expedition were allegedly attempting to assess the effect of high explosive and incendiary aerial bombing on civilians. By most assessments, the experiment, considered a dress-rehearsal for Blitzkrieg, was highly successful.

Acting in support of her French junior partner, German chancellor Angela Merkel was quick to blast French "socialist" François Hollande's idea of changing the so-called "EU fiscal compact" (April 27). It's yet to be assessed what effect Madame Chancellor's statements will have on the French voter.

Combined with the resignation of Dutch PM Mark Rutte last Monday, one of her closest allies, Frau Merkel has her reasons to worry: observers believe the public might be tiring of the "expansionary fiscal contraction" (See here). Be that as it may.

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On both sides of the Atlantic, others have better reasons to worry.

USA GDP grew by a modest 0.5% quarter on quarter. Falling private investment and government spending seem to be driving the reduction. (See here)

But the US is still growing. British GDP shrank by 0.2% in the first quarter of 2012. The minister of State for Universities and Science, David Willets, clarified that it's not that the British economy is shrinking as a consequence of the Cameron/Osborne policies, but that the UK had an "unbalanced economy". (See here)

Moreover, "we have not deliberately taken the economy back into recession", said Willets. You have to understand them: it's not like anybody warned them what the consequences of their policies would be. Right?

But the prize goes to Spain. Last Thursday, S&P downgraded Spain's bonds two notches, to BBB+. Having previously forecast a Spanish GDP growth rate of 0.3% for 2012, S&P now forecasts it will shrink by 1.5%. Bank of Spain figures show that GDP contracted by 0.3%, QonQ, for the first quarter of 2012, while unemployment hits 24.4%.

Merkozy and their local representative Rajoy still have some reasons to celebrate, after all.

Image Credit:
[A] Nicolas Sarkozy. Wikipedia. Photo taken by Remi Jouan in May, 2007. No agreement of Jouan implied by my usage of the photo. For that matter, no disagreement implied, either!