Francois Hollande: Is a Socialist French president a threat to the global economy?

Hollande is the first Socialist candidate in 25 years to be elected France's president, a fact that roiled the markets on Monday. Is it time to sell, sell, sell?

French President-Elect Francois Hollande
(Image credit: Pascal Le Segretain/Getty Images)

François Hollande beat President Nicolas Sarkozy in France's run-off election on Sunday, becoming only the second Socialist Party president elected in post-war France, after François Mitterrand (1981-1995). Sarkozy, for his part, is only the second president in that same period to not win re-election. In his victory speech, Hollande reiterated his vow to renegotiate Europe's recent fiscal austerity–focused pact to save the euro, pledging to shift the EU's economic focus toward growth. "Austerity need not be Europe's fate," he told supporters. But the markets were listening, too, and investors did not seem pleased, with markets tumbling after Hollande's win. Does France's embrace of a Socialist spell trouble for the global economy?

Yes. We're in for a rough patch: Hollande probably won't turn out to be as leftist as many of his supporters hope and critics fear, says Patrick Edaburn at The Moderate Voice. Still, combined with other recent defeats for Europe's pro-austerity governments — especially Greece's rejection of both its mainstream parties on Sunday — Hollande's win is a blow to European fiscal stability, and will "thus have a probable negative impact on the U.S. economy." Hang on tight, world, "it's gonna be a bumpy ride."

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