In the US the public had little interest in the recent French elections. But as predicted here some months ago, Hollande's victory has shifted the balance of power in the Eurozone (which will have a significant impact on the global and the US markets). Some investors in the US should have paid more attention to this.
Today in support of Italy and Spain, Hollande is putting the Fiscal Compact (to which Sarkozy agreed late last year) on ice.
Bloomberg: - Hollande put French endorsement of a German-inspired deficit-control treaty on hold, and Italy and Spain withheld approval of a 120 billion-euro ($149 billion) growth-boosting package unless Germany authorizes steps to calm their bond markets.Monti will walk away from the Fiscal Compact unless the ESM and/or the ECB are used to buy Italian bonds. He is basically saying he's done all he can domestically, and now it's the Eurozone's turn to help him bring down borrowing costs. And Hollande is on board with that. However Germany, who has the most to lose by indirectly becoming the biggest owner of hundreds of billions of periphery bonds, is clearly opposed to this move. The Fiscal Compact is in danger of collapsing. Without it there is little hope of pulling out of the Eurozone crisis.
By provoking an open breach with German Chancellor Angela Merkel, the new French leader overturned the austerity-first consensus that has dominated the debt-crisis response and risked fracturing the Berlin-Paris alliance that built the European Union and euro.