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How much damage have Eurosceptics done?

Monday, May 26, 2014 - 02:21

May 26 - German shares hit all-time highs and Italian assets surged as solid election showings by pro-European forces in both countries provided an antidote to Eurosceptic gains elsewhere. But as Sonia Legg reports the election has still left the EU with a headache.

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The response to the National Front's victory in France in the European elections was swift. Prime Minister Manuel Valls promising tax cuts for households. Desperate measures for desperate times perhaps? Carsten Brzeski is an economist at ING. (SOUNDBITE) (English): CARSTEN BRZESKI, SENIOR ECONOMIST, ING, SAYING: "Economically the country was already imploding. Now on top of that they have a political issue. This really means that France - the second largest economy in the euro zone is falling behind further." German shares hit an all-time high after solid election showings by pro-European forces. Italian assets surged too for much the same reason - President Renzi's party seeing off a challenge from the anti-establishment 5-star movement. (SOUNDBITE) (Italian) BUSINESSMAN, FRANCESCO GRANATA, SAYING: "Italy has reacted, the 5-star movement seemed as though it would win and Grillo himself had promised an enormous victory, which we just didn't see. But is Renzi the man for the future? Only time will tell." (SOUNDBITE) (Italian) ROME RESIDENT, MAURIZIO AVERZA, SAYING: "It just couldn't have gone any better. It looked like we were going towards destruction but now it looks like we are moving towards construction." Greece's government said it was also listening after the leftist Syriza party won the EU election on a wave of anger over austerity. But it wasn't a knockout blow and there's no sign that the euro zone debt crisis is re-rearing its ugly head. That, says German trader Robert Halver, is the way to stop the eurosceptic nationals. (SOUNDBITE) (German) BAADER BANK TRADER, ROBERT HALVER, SAYING: "The euro crisis has to disappear from the heads of European citizens. Once the economy is in better shape public opinion will be less intractable." Germany's Chancellor called the elections "remarkable and regrettable." (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "We need to win back the voters and that's also true for France. I believe a path directed at competition, growth and jobs is the best answer." But the victory of the UK independence party has raised doubts about Britain's long-term future in the EU. It's anti-Europe stance mirrors that of France's National Front. Across Europe eurosceptic and anti-establishment parties now hold around a third of the seats in the Parliament - double what they had before. It's not enough to wield any significant power but it is enough to focus a few minds and influence national politics.

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How much damage have Eurosceptics done?

Monday, May 26, 2014 - 02:21