Europe

This afternoon, it’s even clearer that the French and Greek elections are a significant moment in the life of the Eurozone. It’s not just the nervous market reaction to yesterday’s results, but also the way how the supranational debate has now changed. More so than ever, there are now two clear oppositional fronts. On one side, broadly speaking, are those who say that austerity is a prerequisite for growth. On the other, those who say that austerity must be relaxed for growth to arrive. It’s a situation dripping with black humour. When David Cameron kept Britain out of Europe’s fiscal pact a few months ago, it was portrayed as a

Tonight’s election results mark the next challenge to the euro. In France, the Socialist candidate François Hollande has won. Having campaigned on changes to the fiscal compact, Hollande will have to deliver something on this front. But Angela Merkel, with her own elections next year, will not want to agree to anything that appears to be a watering down of the pact. I doubt, though, that there’ll be that much market reaction to Hollande’s victory. City sources say that it has been priced in for while and that there is an expectation that Hollande will merely accept some window-dressing about growth being added to the agreement. But what could set

For all the coverage of hacking, pasty tax and the like, the continuing crisis in the eurozone remains the most significant political story. Until it is resolved, it is hard to see how the UK returns to robust economic growth. I suspect that the market reaction to a Hollande victory will be limited as it is already pretty much priced in. Those expecting a degringolade will be disappointed. However, if Hollande does actually try and implement some of his more extreme ideas, the markets could take fright. What is far more worrying than France is Spain. There’s a growing sense of inevitability that the Spanish banks will need a bailout

Holland and Hollande; they’re the non-identical twins that are causing palpitations across Europe today. Holland, because the country’s Prime Minister yesterday resigned after failing to agree a package of cuts for his country’s budget. Hollande, because he’s the socialist candidate set to win the presidential election in France, probably eroding that country’s commitment to fiscal consolidation in the process. The markets quivered in fear at this morning’s headlines — and what they mean for the eurozone — even if they have, in some parts, slightly recovered since. It’s all another reminder that the Eurocrisis just isn’t going away — neither for countries such as France and the Netherlands, nor for

The run-off in the French presidential election will be between the candidates of the two main parties, Nicolas Sarkozy and François Hollande. In a boost to the Socialist’s chances, Hollande topped the poll — but he was only a point and a half ahead of the sitting president. But, in some ways, the story of the night will be the best ever result for the Front Nationale, in terms of share of the vote. Marine Le Pen appears to have scored 20 percent, 3 percent more than her father Jean-Marie Le Pen did when he came second in the first round in 2002. The result is another sign of the

David Cameron has returned from what was a bit of a war-and-peace tour of East Asia. Taking arms dealers to Indonesia one day, posing with Aung San Suu Kyi the next. In today’s Sunday Telegraph he writes an almost-defensive piece about it all: ‘With the eurozone producing sluggish growth, we simply can’t rely on trade with Europe to generate the jobs and growth we need. We need to look south and east and do a much better job of winning business in places such as China, India, the Gulf, Africa and South America. That’s why I have been leading trade missions to some of the fastest growing parts of the world, including

There was an element of bafflement in the early BBC coverage this morning of the welcome news that police have identified and surrounded the suspected killer of seven people, including Jewish children, in Toulouse. To some people’s surprise, the BBC correspondent remarked in the early reports, the suspect turned out to be a Muslim, Mohammed Merah. So the entire tone of the Corporation’s coverage of the killings turns out to have been misplaced. Ever since the dreadful news that a gunman had attacked a Jewish school in Toulouse after killing three French soldiers, the overriding assumption on the part of the Corporation was that, unless the killer was merely unhinged,