It has been a weekend of major change in the European political landscape with elections in France, Greece, the UK, Germany and Italy.
In France left-wing Francois Hollande has swept to power beating Nicolas Sarkozy in a win that was far more narrow than the polls had suggested. As he replaces the Conservative Nicolas Sarkozy at the Elysee Palace, Hollande will be watched closely by investors given he is now the second most important elected official in the euro zone.
Investors have worried that Hollande’s relationship with Angela Merkel could be tense at best and worry that differences of opinion on how to solve the debt crisis could lead to political and market uncertainty.
Others are not so worried, saying Hollande’s true colors are not yet known.
“As I have argued for some time, I don’t think you need to be overly concerned about the exit of Sarkozy and entry of Hollande, but we won’t get to know the true colors of Hollande’s policies until after the parliamentary elections are decided on 17 June,” said Unicredit Chief Economist Erik F. Nielsen said in a research note on Sunday.
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