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Is Europe voting against austerity or is Europe voting against tax rises?

By Tim Montgomerie
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Another election result and another bad result for the incumbent.

Angela Merkel's CDU won just 25% of the vote in the huge laender of North Rhine Westphalia.

The Wall Street Journal warns it readers not to get excited about the result. Before 2005 NRW was a stronghold of the opposition SPD, it says. It also notes that, unlike in France, the big German parties are largely agreed about the need for some sort of austerity (although they're not agreed on pace and scale).

The results across Europe are largely being read as votes against austerity. I've also argued that they are votes against the €urozone. But one under-discussed factor might be that they are also votes against higher taxes. New York Times commentator David Brooks made this point within his regular slot for US National Public Radio.

I'm not saying that voters aren't also protesting against spending cuts but we know in Britain that it's been tax rises (on VAT, pasties, charities, pensioners) that have caused Cameron and Osborne their biggest political problems. Deeper cuts in spending aren't going to be popular (think of a one billion spending cut as equivalent to taking £1,000 off one million people) but one way in which centre right parties might protect themselves from the anti-incumbency mood is to limit the tax rises and focus on trimming the EU's bloated public sectors. As John Redwood has argued, we are at the tax saturation point and voters have had enough.


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