Votes in Europe over the weekend for leaders opposed to deep cuts in government spending could create a "real crisis" worldwide, Sen. Mike EnziMike EnziJudd Gregg: The silver lining Judd Gregg: A little change Lobbying World MORE (R-Wyo.) said Monday.
"I'm not sure what's going to happen now that France has decided they're not going to have austerity and Greece has decided they're not going to have austerity," Enzi said on the Senate floor. "That's what put the world into kind of this funk anyway and now they have leaders that say they're going to fight any kind of austerity — could put the world in a real crisis."
Greek voters, meanwhile, punished the two big parties that had approved that nation's deficit-cutting package, giving them just a third of the votes in parliamentary elections that rewarded austerity opponents and fringe groups on the extreme left and right.
The populist revolt has exacerbated worries that financial markets will crash if Europe refuses to tackle its deficit. But others take a different view, arguing that cutting government spending in tough economic times only exacerbates the problem.
"I'm certainly no economist," State Department spokesman Mark Toner said during Monday's press briefing. "But we certainly recognize at the same time that European countries are experiencing hardships as a result of the economic crisis there. And it’s also clear, as they move forward, that some combination of pro-growth and pro-stability reforms are going to be necessary to sustain the stability and the markets there, and spur economic growth. That stands for Europe as well as the global economy."
Enzi's speech came during a floor debate on student loan interest rate legislation.
On Tuesday, the Senate is set to continue considering S. 2343, the Stop Student Loan Interest Rate Hike Act, which extends the current interest rate on Stafford loans at 3.4 percent for a year. At noon, the chamber will vote on a motion to invoke cloture to proceed on the bill.
— This story was updated at 7:46 p.m.