Europe is at a crossroads now, and you can rest assured that the Powers That Be will be trying to influence the new leadership in whatever friendly way they can to change their minds about austerity - and in some not-so-friendly ways as well. The reality is, governments usually do what the IMF and the World Bank "persuade" them to do. The persuading has probably already begun:
Socialist Francois Hollande defeated conservative incumbent Nicolas Sarkozy today to become France's next president, heralding a change in how Europe tackles its debt crisis and how France flexes its military and diplomatic muscle around the world.
Exuberant, diverse crowds filled the Place de la Bastille, the iconic plaza of the French Revolution, to fete Hollande's victory, waving French, European and labor union flags and climbing its central column. Leftists are overjoyed to have one of their own in power for the first time since Socialist Francois Mitterrand was president from 1981 to 1995.
"Austerity can no longer be inevitable!" Hollande declared in his victory speech Sunday night after a surprising campaign that saw him transform from an unremarkable, mild figure to an increasingly statesmanlike one.
Sarkozy is the latest victim of a wave of voter anger at government spending cuts around Europe that have tossed out governments and leaders over the past couple of years.
[...] Hollande inherits an economy that's a driver of the European Union but is deep in debt. He wants more government stimulus, and more government spending in general, despite concerns in the markets that France needs to urgently trim its huge debt.
While some market players have worried about a Hollande presidency, Jeffrey Bergstrand, professor of finance at the University of Notre Dame, said it's a good thing that Hollande will push for more spending throughout Europe to stimulate the economy.
Europe is "going into a really serious and poor situation," Bergstrand said. Hollande "is going to become the speaker for those countries that want to do something about economic growth."
Meanwhile, the situation in Greece after yesterday's election is much more volatile as long as they remain chained to the euro. The country is dependent on loans from the European Union and the IMF just to survive, and they will release those funds only if Greece continues to beggar her own people:
In a surprise result, Greece's Coalition of the Radical Left, or Syriza, which seeks to annul the austerity program, saw its share of the vote more than triple, to 16.2% of the vote and 50 seats—making it the second-largest party in parliament, the ministry projections showed.
Greece's Coalition of the Radical Left, or Syriza, saw its share of the vote more than triple to 15.5%-18.5%-making it the second-largest party in parliament, exit polls showed. Alkman Granitsas reports from Athens.