Europe's scrimping model

„Throw your Euro-stereotypes out the window: Last weekend, a Greek government which has cut public-sector pay and lowered pensions won a clear victory in local elections. Despite strikes and violence, despite the fact that Greece's debt is still growing and more cuts are coming, there will be a Socialist mayor of Athens for the first time in 24 years. (And yes, in Greece the Socialists favor budget cuts and the conservatives oppose them.)

Nor are the Greeks alone. Last month, voters reelected a Latvian government that cut public sector workers' pay by 50 percent. The British government coalition, which is also trying to eliminate benefits and cut spending, remains strangely popular, too. Although - contrary to my previous observation - London witnessed its first continental-style, anti-austerity riot last week, too, there wasn't much general enthusiasm for the protesters. Some of their leaders wound up denouncing the riots, and they haven't hurt the government's poll numbers yet either.

It's too much to call it a pattern, and it may well not be a permanent change: I'm sure there are plenty of European politicians who won't survive their next encounter with voters. But there is something in the air. It almost seems as if at least a few Europeans have actually drawn some lessons from the recent recession and accompanying turbulence in the bond markets. They have realized, or are about to realize, that their state sectors are too big. They are about to discover that their public spending, which seemed justified in good economic times, has to be cut. The middle-class even knows in its heart of hearts that its subsidies, whether for mortgages, university tuition, or even health care, can't last. Some voters even know that their pay-as-you go pension systems aren't sustainable in the long term either.”