European Nations Favor Bailout-Friendly Obama over Romney

President Barack Obama has increased America’s debt to over $16 trillion and has threatened to take the country over the fiscal cliff for political gain. 

He put the country on the path toward becoming more like insolvent European countries like Greece and Spain. And that is why leaders in Europe are trying to help Obama get reelected, fearing Romney will tighten America’s fiscal belt and not be as supportive of Europe’s bailouts, which are in part funded by U.S. tax dollars that go to the International Monetary Fund (IMF). 

Obama endorsed the Greek bailout but when it became apparent Greece would not meet the conditions imposed on it and may have to default and be booted from the EuroZone. European officials have continued to kick the can down the road to reduce the chances of global fiscal instability, which would decrease Obama’s chances for reelection. 

According to The Telegraph, the troika of Greece’s foreign lenders — the European Central Bank, European Commission and the International Monetary Fund — was scheduled to deliver a report last week that most likely would have shown that Greece failed to meet its fiscal obligations, which could have started the process of kicking Greece out of the Eurozone, barring any last-minute renegotiations. However, the Obama administration pressured the EU to delay releasing the report until after November so as not to jeopardize Obama’s reelection chances: 

“The Obama administration doesn’t want anything on a macroeconomic scale that is going to rock the global economy before November 6,” a European Union official said. “As far as European leaders are concerned, they don’t want [Republican candidate Mitt] Romney, so they’re probably willing to do anything to help Obama’s chances.”

European leaders are afraid of Mitt Romney’s presidency (and a potential Republican Congress) — and his potential fiscal conservatism when it comes to bailouts and how much America continues to contribute to the International Monetary Fund — and that is why they are trying to help Obama win reelection by temporarily punting on these fiscal issues in Greece and France until after the November elections. According to the the financial website ZeroHedge: 

European leaders are thought to be sympathetic to the Obama lobbying, fearing that, under pressure from his party in Congress, Mitt Romney would be a more isolationist president than Mr Obama. 

In Spain, the Obama administration also backed a tentative bailout plan that would not have imposed austerity measures on Spain. Sure enough, soon after details of what the contours of a Spanish bailout would look like became public, other European countries wanted a similar deal. After Spain’s bailout deal, the AFP reported “Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return.” 

ZeroHedge said this would prompt Greece to ask for a seat at the renegotiation table:

And remember how everyone was threatening the Greeks with the 10th circle of hell if they dare to renegotiate the memorandum? Well, Spain just showed that a condition-free bailout is an option. 

And that is exactly what has happened. Spain may still request a formal bailout, but they have yet to do so. And many think Spain is delaying any formal requests until after November’s election to help Obama. 

Eurozone officials, fearing Spain would not be able to meet conditions imposed on it like Greece, have already given Spain until 2014 to reduce its deficit. Spain is central to the Eurozone because it is the fourth largest economy in it, and the country’s economic failure could potentially topple the Eurozone alliance: 

Spain is at the core of Europe’s financial crisis because, as the fourth largest economy in the 17-country eurozone, it would be hugely expensive to rescue should it lose access to bond markets.

Obama could have used America’s leverage to pressure countries like Greece and Spain into taking more immediate steps to reform their fiscal houses. But Obama never did and instead supported the bailout and stimulus proposals.

Obama, at Thursday night’s Al Smith Charity Dinner, joked about how much the rest of the world liked him more than Romney.

“After my foreign trip in 2008, I was attacked as a celebrity because I was so popular with our allies overseas,” Obama said. “And I have to say I’m impressed with how well Governor Romney has avoided that problem.”

European countries like Greece and France like Obama not because of his celebrity status — though that helps — but because they know a president prone to supporting reckless spending and stimulus programs in the U. S. will not be as harsh on them when it comes to bailouts as a President Romney and a Republican-controlled Congress would be.