Sunday’s elections in France and Greece, may have represented a mark in the current economic situation in Europe. Positive or negative? Here’s the real question, whose answer depends on the motivations of each observer.
As an employee, I see this change to the left by one of the major European economies with satisfaction. Certainly, henceforth the pressure on the node that embraces the throats of millions of public employees by the various countries of the Eurozone will be reduced. Nobody believes that austerity will cease, but certainly will tend to slow the galloping pace of the last months.
As an investor, this change worries me. Contrary to what we were made to believe, workers’ rights are inversely proportional to companies’ profits. This couldn’t be (?) otherwise, given that the cost of labor is one of the heaviest bills in the organizations’ balance.
Many other investors think similarly, and begin to see these changes as a subtraction on the companies’ results, especially those who have taken advantage from this crisis. But, are there so many companies gaining with the crisis and the austerity? If fewer rights represent savings on salaries, they also represent a decrease in the consumers’ purchasing power and consequent breaks in the business, especially on the products and services companies. And from this standpoint, the focus on investment could even be economically attractive in the medium / long term!
After all, what means this change in France? It brings, first of all, some hope. And hope can move mountains, such as motivation and acknowledgment (concepts that have fallen into disuse or were never properly used, and that could help answer the question subtly brought up above). It will also bring some moderation to the maneuvers planned by the austere Merkosy axis. And if there were no certainties about the effectiveness of such an aggressive austerity, time is showing us that in fact something else is needed, some softness, some investment between this erratic shots. My apprehension is that Mrs. Merkel also fall (apprehension and desire, we’re so tired of her!), transforming this economist Europe in a Europe too socialist, returning to the excesses of the pas, responsible for all this situation.
Anyway, it is necessary to change something! Let’s pass then to Plan B, guinea pigs are already realigned …