Polls in France show that current president Nicolas Sarkozy will serve only one term. He is about to be defeated by Socialist Francois Hollande. Hollande has said he will increase taxes on the rich. Some economists believe that his tax plans will be regressive and will hurt the level of income to France’s treasury.
Hollande has also said he will increase what the government spends to stimulate France’s anemic economy. These actions could cause ratings agencies to quickly cut their ratings of the nation’s sovereign paper. That may have the affect of increasing France’s borrowing costs. Hollande’s view of how the EU has pressed austerity on nations in the regions which are economically weak may also alter the tenor of how the southern European nations are treated.
Sarkozy has been a partner, although often a reluctant one, of the major power in the region–Germany. A fracture in that relationship could upset the current plans to save the EU economy at least as far as the area’s finance ministers decided recently.
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