Mainstream politicians throughout Europe would be well advised to heed the warnings of Manuel Valls, the French prime minister, who labelled yesterday’s European election results “a shock, an earthquake that all responsible leaders must respond to”. That is not because the European project will be derailed by the new parliament (it will not). Rather, it is because an inadequate response risks damaging its members further, in ways that would be even harder for any government to fix.
Until now, many of Europe’s more traditional leaders had taken considerable comfort in the massive transformation of the region’s financial landscape. In less than two years, they had gone from battling a financial crisis to enjoying a period of tranquillity that even saw these same spreads reach record low levels just a couple of weeks ago. Yet some were punished heavily at the ballot box because they failed to deliver on what really matters for citizens – particularly growth, jobs and rising living standards. Continue reading »