Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

Europe's anti-austerity elections carry risk - Key

John Key. Photo / NZPA
John Key. Photo / NZPA

Prime Minister John Key has a blunt message about the voters in France in Greece who ousted leaders at the weekend with austerity programmes to reduce debt.

"There is no simple way through this. If you live beyond your means, you eventually run into a brick wall," he told reporters this morning at Parliament.

"In the end if you look at a country like Greece, they can vote against austerity - but if they don't get their books back in order and if they don't pay the piper they will be kicked out of Europe.

"And once that happens, if it does, that has very big implications for Greek companies about whether they can raise capital and whether there is an increase in unemployment in Greece."

New Zealand's accounts were in far better shape than those countries.

"What we are trying to do is make sure we don't load up the next generation of New Zealanders with debts that substantially reduce their choices."

New Zealand's economic relationship with France or Greece was not large but the overall relationship with Europe was significant and Europe's impact on the rest of the world was quite significant.

China had slowed down because Europe had slowed down.

Finance Minister Bill English said that if the exchange rate kept dropping, it would be good for New Zealand as long as Europe continued to find ways through its problems.

The Governments elected at the weekend had yet to be tested on that.

"There's quite a bit of rhetoric in Europe about doing things completely differently.

"But in the end they have got to deal with the real situation of huge debts and economies that aren't quite as competitive as they need to be.

"Leaders of those Governments will have to deal with the same issues as the Government who just got thrown out."

- NZ Herald

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