David Miliband - After the elections in France and Greece, is the Eurozone better or worse off?

David Miliband - After the elections in France and Greece, is the Eurozone better or worse off?

The warning lights are flashing red again in Europe. It’s little wonder; successive rescue plans have failed to address the problem of the economic imbalances affecting the future of the eurozone. However, the political imbalances within the zone, and within the European Union more generally, are at least as important. In some cases these prevent economic problems are being addressed; in others they exacerbate them. The French election offered a chance to achieve a new start — and only because of victory by the new Socialist President-elect, François Hollande.

The most important political imbalance is in the Franco-German axis. In the first half of the Sarkozy presidency, this was largely a matter of style. Mr Sarkozy’s hyperactivity (and short attention span) did not sit easily with the more cautious approach of Chancellor Merkel. The problem now is different. Since the famous “walk on the beach” at Deauville in October 2010, when Mr Sarkozy signed up to austerity economics, Mrs Merkel has had no trouble handling her French counterpart. But the price for this has been declining or negative growth across Europe — and a rising cost for eventual resolution.

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