Although the Wisconsin recall vote and the Indiana primary are coming up, the most important elections this week won’t be happening in the Midwest, hell, not in even in the US, but in Europe. This week will we see important elections in both France and Greece. Now although it could be argued that every international election is important to the US, this is not a political science nor philosophy class so keep those argumentative thoughts to yourself (I had to say it just in case). These elections are particularly important because of who they are and the time they’re taking place.
Why is the “who” is important? Glad you asked. Greece, who you’ve probably heard about in the news, faces a choice between continued use of the euro or relaxing austerity measures and pushing the euro away. Either way investors will be watching this election closely as through either outcome large changes will be coming. If they decide to stay in the Eurozone then risk stays high, and about 11.5 billion euros will need to be cut next year for their government to function. High risk is bad for Obama as another European financial crisis could ruin a fragile recovery and greatly diminish his chances of reelection. If Greece decides to leave, then we have a whole other host of issues with a newer more independent Greece.
In France we have a huge election between conservative and incumbent Sarkozy and socialist Hollande. Hollande has been leading Sarkozy in the polls so the chance of a change here is probable (although the absolute latest polling shows Sarkozy on the rise). A Hollande socialist presidency would be a huge departure from the policies of Sarkozy and would likely fray relations with European powerhouse Germany (Hollande just doesn’t like Merkel). Also, through his election, austerity measures in France would likely be eased which would increase risk in the EU market. Once again, due to the timing of this right before our own presidential election, a risk increase in the market can only be bad for Obama while dealing with a new socialist president bodes poorly for Romney who would get along significantly better with Sarkozy.
So if you’re a campaigner or a pundit (or someone that imagines you are) then take a second look (or first look) at those elections as they might come to shape our own presidential narrative.