France held the first round of its presidential elections over the weekend, and it spells real trouble for President Sarkozy — and German Chancellor Merckel. Sarkozy took only 27% of the vote, bested by the socialist party candidate, Francois Hollande. The far left candidate pulled in 11% and can be relied on to offer that to Hollande. The far right took 18%, but their leader shows no inclination to back Sarkozy. Absent an April Surprise, it’s difficult to see how Sarkozy gets reelected on May 6th.
Hollande, the socialist, has run a campaign critical of Sarkozy’s divisiveness, and of the EU approach to its financial crisis. He got a boost early on from German Chancellor Merckel endorsing Sarkozy — French voters prefer the image of a smart French rider astride a strong German horse to that of a bossy teuton meddling in French elections. Hollande campaigned vigorously on his opposition to the “Merkozy”
In an effort to stave off Eurozone collapse, Chancellor Merckel has intimidated other European leaders into an austerity first strategy. It is now reaching its political limits of acceptability not only in the political periphery of Greece, Spain, Portugal and Italy, but also in the bedrock of the Eurozone. The honeymoon is over for technocratic governments in Greece and Italy; both are threatened by elections to overturn austerity. Spain failed to meet its budget cuts and the newly elected government is facing a public backlash. Even the Netherlands is likely to call elections after their government failed to agree on needed spending cuts.