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| Eurozone crisis live: Greek market rocked by election | Eurozone crisis live: Greek market rocked by election |
| (40 minutes later) | |
| 12.27pm: The view from Dublin - from our Ireland correspondent Henry McDonald. | |
| France's protest vote against EU imposed austerity programmes has left the Fine Gael-Labour government in Dublin with a headache as it tries to persuade Irish voters to endore the European fiscal pact. | |
| Opponents of the fiscal treaty such as Sinn Fein and the United Left Alliance have been trying to harness Francois Hollande's triump to convince the Irish electorate they can say No to yet another EU financial reform plan and, like the French, renegotiate for a better deal. | |
| The Enda Kenny led government still believes it can secure a yes vote at the end of the month but there are fears that anger over domestic issues ranging from the imposition of new household charges and water rates as well as the ongoing recession could prompt to votes to register a protest vote and reject the treaty. | |
| In response the Yes camp have been busy this morning in Dublin with the formation of a new alliance of civic bodies from farmers to the business community and even a former leading figure in the Irish Labour Party calling on Ireland to back the treaty in the referendum on 31 May. | |
| Among those voices speaking up for a Yes vote today was the former President of the European parliament and former Irish MEP Pat Cox. | |
| At the launch of the Alliance for Ireland group in a Dublin hotel this morning Cox said a Yes vote was needed so that the Republic would continue to have accss to the European Stability Mehcanism after 2013. | |
| "A Yes vote will signal certainty as to where Ireland stands. A No vote will add to uncertainty and in a period of crisis and national vulnerability will raise additional questions about our national credit-worthiness," Cox said. | |
| He claimed that a No vote would severely damage Ireland's ability to go back into the world markets to borrow and no longer to rely solely on the IMF and ECB to shore up its public services. | |
| "As a State planning to return to the markets Ireland does not need at this time a self-imposed credit-negative event with its downside consequences. To point this out is a duty and not a threat. The Irish people deserve to be told the truth." | |
| Former Labour TD and MEP Brendan Halligan said the economic future of the country was the central issue in the referendum and that was what had prompted so many organisations and individuals to unite under the slogan "Securing Our Future". He said that at present the country was bankrupt and needed to borrow from other countries in order to pay our way and repay existing debt. | |
| "We will need their help for the foreseeable future, in particular from the other countries participating in the euro. For that reason alone the ratification of the stability treaty is essential. We should ratify it in our own self-interest, just as Portugal and Greece have done." | |
| Pat Smith, the secretary general of the Irish Farmers' Association, said a Yes vote was in the best interests of the country, while a No vote would be massively destabilising. | |
| 12.23pm: The Athens stock market is in freefall... down 7.4%. By contrast, the French CAC continues to recover and is now down only 0.2%. Germany's Dax hast lost 0.86%. | |
| 12.21pm: Here's some more reaction to the strong German industrial orders figures. Klaus Baader at Société Générale says: | |
| The remarkable feature was that this gain in export orders came despite no growth in orders from other euro area member states. But this lack of dynamism was more than made up by a 4.8% month on month gain from non-EMU countries, after a gain of 4.9% in February. Hence, these data support other evidence that global trade is indeed reviving, driven mostly by import strength in emerging economies. | |
| The key impulse for export orders came from demand for capital goods as usual, as this sector is by far the largest and usually also the most volatile. | |
| 12.14pm: Moving out of the austerity trap and towards a growth and employment strategy will be crucial for France as it tries to tackle the jobs crisis that is particularly affecting the young, said Raymond Torres from the International Labour Organization (ILO). | |
| What's important now is to stimulate job-rich growth, ensure a more progressive funding of social protection so that it weighs less on low-paid jobs, and adopt a special programme for tackling youth unemployment –presently more than twice as high as adult unemployment. That's the best and quickest way of improving the employment outlook. | |
| France has more than 2.6 million jobless people according to the latest available unemployment statistics based on ILO standards. Around 22% of French 15 to 25-year-olds are unemployed. | |
| According to Torres, head of the ILO's International Institute for Labour Studies, France has the scope for tackling the job crisis while meeting fiscal goals: | |
| France's financial situation and competitiveness are better than in some of its neighbours. However, a major policy shift is called for as the country moves forward. | |
| The first step is to come out of the austerity trap that has characterized policies in several European countries over the past two years or so. | |
| Likewise, EU member states should refrain from deregulating labour markets. In the present crisis context, deregulation will aggravate job losses without promoting job creation. Of course, looking further ahead, badly-designed regulations should be reconsidered. Successful reforms as in Austria suggest that social dialogue is an effective instrument in this respect. | |
| He said "the second step for France is to embark on a growth and employment strategy", adding that "reinitiating the credit market for small enterprises, the main providers of job creation, is critical to achieve this goal". | |
| One way of boosting credit is to strengthen guarantees for existing banks that lend to small firms, as in Germany. Another option is to create a new credit institution which focuses on increasing investment in the real economy, notably in industrial sectors and services where the country has a comparative advantage. | |
| 12.07pm: Forget the elections, German industrial orders have come in very strong. Orders jumped 2.2% in March, but demand came almost exclusively from countries outside the eurozone. | |
| Carsten Brzeski at ING Bank said: | |
| Today's German new order data nicely illustrate the eurozone's dilemma. While everyone is talking about growth or the lack of growth, demand for "Made in Germany" is still stable. However, it is demand from Germany and outside the eurozone, not from other eurozone countries. | |
| It is doubtful the German engine will be able to continue running on non-eurozone fuel for a long time. | |
| BMW and Porsche reported record first quarter profits last week as wealthy Chinese snapped up sporty sedans and SUVs. | |
| 12.03pm: Here are Klaus Regling's comments in full: | |
| If Greece exited the eurozone that would "of course have a huge impact not just for other programme countires, not just for the banks, but also for Greece itself". Greece's public creditors would also suffer. | |
| It would be a catastrophe for Greece. | |
| 11.26am: Some headlines flashing on Reuters. Klaus Regling, who heads up the temporary European bailout fund EFSF, has just said that Greece's exit from the eurozone would have "catastrophic" consequences for Greece and its creditors. | 11.26am: Some headlines flashing on Reuters. Klaus Regling, who heads up the temporary European bailout fund EFSF, has just said that Greece's exit from the eurozone would have "catastrophic" consequences for Greece and its creditors. |
| 11.15am: Let's have another look at financial markets. The Greek stock market is still down 6.3% while the French market has recovered somewhat, trading down only 0.3% and the German Dax has slid 0.9%. UK markets are closed today. | 11.15am: Let's have another look at financial markets. The Greek stock market is still down 6.3% while the French market has recovered somewhat, trading down only 0.3% and the German Dax has slid 0.9%. UK markets are closed today. |
| On bond markets, the yield, or interest rate, on the ten-year Greek government bond is 23.25% while the German equivalent is at 1.57%, the ten-year gilt yield at 2% and the French equivalent at 2.78%. The Spanish yield has risen to 5.79% while the Italian yield is at 5.65%. | On bond markets, the yield, or interest rate, on the ten-year Greek government bond is 23.25% while the German equivalent is at 1.57%, the ten-year gilt yield at 2% and the French equivalent at 2.78%. The Spanish yield has risen to 5.79% while the Italian yield is at 5.65%. |
| 11.12am: Giles Tremlett from Madrid reports that: Something afresh is going on in Spain's banking sector ... but | |
| Spain's prime minister Mariano Rajoy has this morning announced a further round of reforms to the country's ailing banking system for later this week. | Spain's prime minister Mariano Rajoy has this morning announced a further round of reforms to the country's ailing banking system for later this week. |
| Full details will only come after Friday's cabinet meeting, leaving everyone guessing about the latest plan for cleansing Spain's banks of toxic real estate assets - announced during a radio interview this morning. Rajoy said he was against creating a "bad bank" to absorb the toxic assets held by Spanish banks who lent generously to developers, builders and speculators before the residential property bubble burst in 2008. | |
| But he has backtracked before and his finance minister has said the government intends to approve the creation of special vehicles (which many see as mini bad banks) where banks can offload these assets. Again, it is unclear what form these mini bad banks will take, or whether public money will be involved. | But he has backtracked before and his finance minister has said the government intends to approve the creation of special vehicles (which many see as mini bad banks) where banks can offload these assets. Again, it is unclear what form these mini bad banks will take, or whether public money will be involved. |
| Many analysts believe more public money will be needed for a full cleanout of Spain's banks, with speculation that this might come directly from Europe's EFSF rescue fund. El País today reports that giant Bankia, which has €32bn in toxic real estate assets, is to get a huge government loan. Reuters says officials have put together a rescue plan for Bankia – which holds 10% of Spanish deposits – that may be up to €10bn. | |
| Rajoy is not famous for the clarity of his announcements. The following phrase from today's interview might mean he is preparing to use more public funds – or not. "The last thing I want to do is inject or loan public money, but if I have to I will – just as other governments have done," he said. In a rare media appearance, Rajoy also admitted that VAT hikes were a possibility as Spain tries to slash its deficit. | |
| 11.07am: News in from Athens where Helena Smith, our correspondent, says that after Greece's shock vote it is far from certain whether the debt-stricken country will continue receiving rescue loans. | |
| Greek TV channels are reporting that the country's electoral earthquake has been met with "stunned silence" by officials at the International Monetary Fund in Washington. "Our sources at the fund are telling us they had no idea of the extent of the anger and anti-austerity feeling in Greece. They are amazed," said Alpha TV's Washington correspondent. | Greek TV channels are reporting that the country's electoral earthquake has been met with "stunned silence" by officials at the International Monetary Fund in Washington. "Our sources at the fund are telling us they had no idea of the extent of the anger and anti-austerity feeling in Greece. They are amazed," said Alpha TV's Washington correspondent. |
| Given the IMF's role in the two bailouts that have propped up the Greek economy since May 2010, the fund is watched closely by US-based Greek journalists now famed for putting IMF spokesmen on the spot in daily briefings. "They are insisting they want commitments to the [debt relief] programme," the correspondent said. | |
| A team of EU monitors, to be placed permanently in the capital is expected to arrive within the week. Greek radio channels this morning reported the inspectors would want to see "solid proof" that Athens is determined to stick to the principles of its latest €130bn financial support programme. | |
| The debt-stricken country faces payment of civil servants' wages and pensions in less than a month – bills worth about €1.5bn. Greece has been told, clearly, by creditors that failure to adhere to the rules – for which read austerity measures and unpopular structural reforms – will result in a freezing of funds and automatic default. | |
| "There are doubts whether the [rescue] loans will keep coming in," said Flash radio's economic reporter. "And they extend to whether the country will be able to tap the special account that has been set up [for the funds]." | |
| Prior to Sunday's election, the German finance minister Wolfgang Schäuble warned Greece that it should "expect to pay the consequences" if it did not abide by its commitments. He may now be ruing his words – the German intervention has been interpreted by analysts as one more reason for pushing Greeks to massively reject the EU-dictated belt tightening. /> />Greece's conservative New Democrat leader, Antonis Samaras, is expected to be given a mandate to form a government after 1pm when, in keeping with tradition, the speaker of the Greek parliament will formally present President Carolos Papoulias with the results of the vote. | |
| He will have three days in which to persuade other parties to join him in a coalition – a feat that few commentators currently think possible. If that is the case, the mandate will then be given to Syriza, the coalition of radical left and green groups which emerged as the election's biggest winner, garnering 16.6% of the ballot compared to the 13.2% captured by the mainstream socialist Pasok – a vote that now makes it the second biggest party in the 300-seat parliament. | |
| Fears of the country plunging into protracted political instability were reflected in the continued freefall of the Athens stock exchange where banks' shares have lost up to 20% of their value this morning. Meanwhile, repeated pledges by Syriza to annul the latest rescue accord has added to the climate of uncertainty. | |
| Syriza leader, Alexis Tsipras, told Greeks late on Sunday: "We have won the war but not the battle." That, he said, would come when the "cruel bailout measures" were cancelled once and for all. "The parties that signed up to them are now in a minority," he said. | |
| Speaking on the eve of the poll, the 38-year-old politician reassured me that he believed in the euro "but not the policies pursued in its name". Along with the annulment of the controversial loan agreement he said his party's priority would be to create a "protective shield" around the poor, who had been worst-hit by repeated rounds of austerity. "It could start with the rich paying taxes. They have to do this. There is too much tax evasion by Greeks who have money," he told me. | |
| 10.58am: ... and some analysis of the Greek election, again from Nicholas Spiro. | |
| 1. Greece needed this election like it needed a hole in the head. The results confirm what has been patently clear for some time: there's no political consensus for the kind of reforms that Greece must implement if it wants to remain in the eurozone. Greek parliamentary politics has just become much more fragmented and radicalised. This is a large-scale protest vote with very little consideration of the implications of non-compliance with the terms of Greece's second bailout package. The strong showing for Syriza is a rebuke to Pasok and New Democracy which will struggle to form a durable coalition government. Politics has trounced economics. | |
| 2. The Greek crisis was overshadowed by the Spanish one over the past few months. This election brings into sharper relief the growing political risks to an adjustment programme that is already bedevilled with huge fiscal, structural and institutional risks. To many external observers, particularly in Germany, the result of this election will be interpreted as a sign that Greece has had enough of non-stop austerity and recession and refuses to accept the stringent conditions attached to its financial rescue package. | |
| 3. The markets expected the result of the Greek election to be a messy one. This adds to what remains a very bleak picture for a country whose membership of the eurozone is hanging by a thread. It will now prove even more difficult for Athens to make headway on implementing key fiscal and structural reforms. | |
| 10.57am: More analysis of the French election from Nicholas Spiro, managing director of Spiro Sovereign Strategy. | 10.57am: More analysis of the French election from Nicholas Spiro, managing director of Spiro Sovereign Strategy. |
| 1. Franҫois Hollande's victory is a historic one in France and a seminal event in European politics. It's the first time since 1988 that the left has won a French presidential election and the first time since 1981 that a Fifth Republic president failed to get re-elected. L'anti-Sarkozysme helped bring Mr Hollande to power. Mr Sarkozy lost because he failed to win over a sufficient number of National Front voters, many of whom grudgingly backed Mr Hollande. Although the right won a bigger slice of the vote in the first round, the political arithmetic in the second favoured Mr Hollande. | |
| 2. Mr Hollande appealed to the anxieties of French voters. Austerity is a dirty word in France, but never more so than now. This election is a rebuke to Germany's austerity-focused approach to managing the eurozone crisis. Yet satisfying anxieties is one thing, proposing credible solutions is another. The election was more about Mr Sarkozy's shortcomings than policies to address France's economic weaknesses. While Mr Hollande is not an old-style tax-and-spend socialist, his understanding of "growth" differs sharply from that of Germany and the ECB. France has just elected a president who believes that austerity is failing and is in favour of more stimulative policies. | |
| 3. The markets will remain suspicious of Mr Hollande. His programme gives investors reasons to be even more concerned about France's creditworthiness. Yet Mr Hollande is by nature a pragmatist and will attempt to reach a consensus with Chancellor Angela Merkel as quickly as possible. The question is not whether he will embark on a spending spree – he can't and he won't – but to what extent he will feel emboldened to challenge Germany and the ECB. It's noteworthy that Mr Hollande's proposals to erect a stronger financial "firewall" are actually more in line with market thinking. | |
| 4. Attention now turns to France's parliamentary election next month. In many ways, this is the election to watch. The anti-austerity backlash in France has just been given a huge boost and the centre-right UMP is unlikely to do well. If the new parliament is decidedly "populist-leftist", this may make it more difficult for Mr Hollande to govern in a centrist manner. | |
| 10.42am: Let's have a look at some of the European papers. Germany's liberal daily Süddeutsche Zeitung, based in Munich, is enthused by Hollande's victory. With the heading "Adieu election campaign, bonjour reality," French correspondent Stefan Ulrich writes from Paris: | 10.42am: Let's have a look at some of the European papers. Germany's liberal daily Süddeutsche Zeitung, based in Munich, is enthused by Hollande's victory. With the heading "Adieu election campaign, bonjour reality," French correspondent Stefan Ulrich writes from Paris: |
| France must face the truth after the victory of François Hollande over Nicolas Sarkozy. The astute Socialist can show the ailing nation the right way in this situation. For Merkel, Hollande might turn out to be the better partner. "Merklande" has a good chance to meet the challenge posed by Europe. | |
| The German conservative daily Frankfurter Allgemeine Zeitung is, naturally, far more cautious. Under the headline "Moi, Président," Günther Nonnenmacher writes: | The German conservative daily Frankfurter Allgemeine Zeitung is, naturally, far more cautious. Under the headline "Moi, Président," Günther Nonnenmacher writes: |
| It wasn't enthusiasm but his persistency that led François Hollande to victory. And the weakness of his opponent Sarkozy ... | |
| President Hollande will not be allowed any time to get used to the job. In 10 days G8 leaders meet in America, directly followed by the Nato summit in Chicago: with his decision to withdraw French troops from Afghanistan by the end of the year Hollande will arouse little enthusiasm. Then follow European matters, where the first test will be with how much persistency Hollande will try to change course. | |
| And France's left-leaning daily La Libération writes: "For the Socialists, the real work begins". In an editorial entitled "Enfin" ("Finally"), its director, Nicolas Demorand, is jubilant. | |
| The joy, the immense joy of watching one parenthesis close and a curse fade. And in what manner! François Mitterrand was not a historic anomaly but simply the first president from the left. Now there's a second: François Hollande. For the people of the left, 2012 revives 1981, gives back life and colour to those old sepia images that seemed condemned to the history books. | The joy, the immense joy of watching one parenthesis close and a curse fade. And in what manner! François Mitterrand was not a historic anomaly but simply the first president from the left. Now there's a second: François Hollande. For the people of the left, 2012 revives 1981, gives back life and colour to those old sepia images that seemed condemned to the history books. |
| 10.07am: The euro has tumbled this morning, hitting a three-month low against the dollar, a 3-1/2-year low against the pound and a 2-1/2-month trough against the yen. | |
| Traders reckon the euro has further to fall in coming days. | Traders reckon the euro has further to fall in coming days. |
| 10.02am: Some more reaction, from Markus Huber at ETX Capital: | 10.02am: Some more reaction, from Markus Huber at ETX Capital: |
| Although Mr Hollande's victory yesterday didn't come to many as much of a surprise, especially after having led the polls with a sizeable lead for several months and being endorsed by all of the parties leaning to the left after the first round of presidential elections, stock markets are still struggling this morning to come to terms with the fact that the alliance Merkel-Sarkozy has been terminated. | |
| The main problem stock markets across Europe are facing this morning is not that Mr Hollande has become the new French president but rather the uncertainty his election is bringing with him. While many are convinced that President Hollande will be fairly limited in regards to what he can do when it comes to turning back austerity measures already agreed on within the eurozone, many are worried that the eurozone will be less united in the future and therefore not be able to combat the financial crisis and any future crisis in such a quick and decisive manner as before. | |
| For the next few days and weeks the direction of the stock market will very much hinge on how much efforts all sides, mainly chancellor Merkel and President Hollande will be putting into trying to work together and to find common ground. | |
| 9.58am: A quick look at the stock markets: Athens is still down 6.6% at 644.45, after the country's main parties failed to win enough votes to form a ruling coalition. The French market is holding up reasonably well, only down 1.4%, while Germany's Dax has lost 1.6%. | |
| 9.49am: My colleague Alexandra Topping is doing a sister live blog on the the latest news, reaction and analysis after Hollande's victory in France and the big protest vote in Greece. | 9.49am: My colleague Alexandra Topping is doing a sister live blog on the the latest news, reaction and analysis after Hollande's victory in France and the big protest vote in Greece. |
| European leaders are busy congratulating Hollande on his victory, even David Cameron, who declined to meet the Socialist president on a recent trip to London. One of the first to call was the German chancellor, Angela Merkel, who invited Hollande to Berlin. That meeting will be interesting, given his insistence in his victory speech that "austerity can no longer be the only option". | |
| 9.42am: Markets have clearly taken fright at the election results. Credit default swaps in France, Spain and Italy have risen. French five-year CDS are up 5 basis points to 194, Spanish CDS up 9 points to 486 and Italian swaps are up 12 basis points to 442, according to Markit. | 9.42am: Markets have clearly taken fright at the election results. Credit default swaps in France, Spain and Italy have risen. French five-year CDS are up 5 basis points to 194, Spanish CDS up 9 points to 486 and Italian swaps are up 12 basis points to 442, according to Markit. |
| 9.38am: Looking at the surge in Mediterranean bond yields – Greek 10-year yields have reached 23%! – while the equivalent German yield has dropped to 1.56%, David Buik of BGC Partners, says: | |
| Many expect Mediterranean country bond yields to continue rising until the EU gets its act together. Markets may be sepulchral today. Tomorrow is a new dawn – I am less than convinced how brave it will be! | Many expect Mediterranean country bond yields to continue rising until the EU gets its act together. Markets may be sepulchral today. Tomorrow is a new dawn – I am less than convinced how brave it will be! |
| He also notes that bank analyst Ralph Silva has made the following succinct observation against a background of French euphoria and Greek bravado – "None of these newly elected politicians have actually seen the books! They may find the cupboard is bare!" | |
| 9.24am: Mohamed El Erian, chief executive of bond fund giant Pimco, was quick to give his view on the national elections in France and Greece, and regional elections in Germany. | 9.24am: Mohamed El Erian, chief executive of bond fund giant Pimco, was quick to give his view on the national elections in France and Greece, and regional elections in Germany. |
| Writing on the CNBC guest blog last night, he said: | Writing on the CNBC guest blog last night, he said: |
| The common message from the electorate is undeniable, reminiscent of a famous line in the 1976 movie Network: "I'm as mad as hell, and I'm not going to take this anymore!" | The common message from the electorate is undeniable, reminiscent of a famous line in the 1976 movie Network: "I'm as mad as hell, and I'm not going to take this anymore!" |
| The first thing that Sunday's elections scream out is anti-incumbency. French president Sarkozy joined the growing list of leaders that have been thrown out of office by disgruntled citizens. In Greece, exit polls suggest that the combination of the two usually dominant parties failed to secure even 50% of the votes. And in Germany, the ruling coalition seems to have experienced another setback. | The first thing that Sunday's elections scream out is anti-incumbency. French president Sarkozy joined the growing list of leaders that have been thrown out of office by disgruntled citizens. In Greece, exit polls suggest that the combination of the two usually dominant parties failed to secure even 50% of the votes. And in Germany, the ruling coalition seems to have experienced another setback. |
| The elections also show that an unusually large number of Europeans are opting for fringe parties, some of which are yet to define their vision beyond the need to dismantle the past. In Germany, exit polls imply that the Pirate party may have secured 8% of the vote in Schleswig-Holstein, giving it a voice in a third regional parliament after similar success in Saarland and Berlin. | The elections also show that an unusually large number of Europeans are opting for fringe parties, some of which are yet to define their vision beyond the need to dismantle the past. In Germany, exit polls imply that the Pirate party may have secured 8% of the vote in Schleswig-Holstein, giving it a voice in a third regional parliament after similar success in Saarland and Berlin. |
| In Greece, both extreme left and extreme right parties are celebrating a surge in their popularity. And all this follows France's extreme rightwing presidential candidate getting almost 20% of the votes in the first round a couple of weeks ago. | |
| Simply put, this translates into more fragmented European politics, at least in the short run. A politically more disparate Europe will find it even more challenging to reach common ground on a range of important issues. | Simply put, this translates into more fragmented European politics, at least in the short run. A politically more disparate Europe will find it even more challenging to reach common ground on a range of important issues. |
| 9.14am: Good morning and welcome to our eurozone live blog, which on this public holiday in the UK promises to provide lots of twists and turns following the elections in France and Greece. | 9.14am: Good morning and welcome to our eurozone live blog, which on this public holiday in the UK promises to provide lots of twists and turns following the elections in France and Greece. |
| The prospects of a fight against austerity measures in Europe after the election of François Hollande – the first Socialist president in France for nearly 20 years – and an inconclusive election in Greece have already rattled markets in early trade. | |
| The Greek stock market fell 7.7% in early trading to 636.7 while the banking index was off 19%. In France, the CAC 40 index dropped 1.7%. The euro fell as far as $1.2955, its lowest since 25 January. | |
| There were also early signs of a flight to safe havens. German government bond futures reached a record high of 142.40 in early trade while the yields on 10-year German bonds – which move inversely to price – were 2 basis points lower at 1.56%. The record low of 1.549% is within sight. | |
| Overnight, Japan's Nikkei 225 index lost nearly 3%, to reach its lowest close in nearly three months of 9,127.39. Hong Kong's Hang Seng slid 2.4% to 20,583.14. | |
| London stock markets are closed today which is likely to ensure that trading volumes across the eurozone are unusually thin. | |
| Gary Jenkins of Swordfish Reasearch was quick with his take on the elections this morning. | |
| The election of the new French president Mr Hollande may well be a seminal event in the history of the eurozone and over the next few days/weeks and possibly months we will see whether he sticks to his intentions to renegotiate the fiscal compact and promote a growth agenda or whether the reality of the situation and the German position results in him moderating his policies. Whilst many people have suggested that a Hollande victory is "priced in" to the markets that remains to be seen and it is his relationship with Merkel that may well determine the future of the eurozone. | The election of the new French president Mr Hollande may well be a seminal event in the history of the eurozone and over the next few days/weeks and possibly months we will see whether he sticks to his intentions to renegotiate the fiscal compact and promote a growth agenda or whether the reality of the situation and the German position results in him moderating his policies. Whilst many people have suggested that a Hollande victory is "priced in" to the markets that remains to be seen and it is his relationship with Merkel that may well determine the future of the eurozone. |