The Eurozone's austerity measures came under scrunity this weekend as markets reacted to elections in France and Greece.
In France, the socialist François Hollande who campaigned pledging to re-negotiate the austerity measures and stimulate economic growth, was elected to succeed Nicholas Sarkozy. Following his victory, Hollande said, “Austerity need not be Europe’s fate.”
Germany's chancellor Angela Merkel responded promptly, insisting that the fiscal pact, endorsed by out-going President Sarkozy was "not negotiable".
Merkel said,
“We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries,”
“We are in the middle of a debate to which France, of course, under its new president, will bring its own emphasis,”
“But we are talking about two sides of the same coin — progress is only achievable via solid finances plus growth.”
Meanwhile CAC 40, France's blue chip index, and the Euro fell sharply in early trading, before recovering to negate losses.
In Greece, stocks fell by 7.7% in early trading as Antonis Samara, head of the New Democracy party remains unable to form a stable coalition government.
Germany and the EU have urged Greece to abide by the austerity programme and the EU-IMF bailout plan.
