Euro elections cause equity sell off

The knee jerk reaction to the French and German election results, was a substantial sell off for equities in many senior markets, as the new French President Francois Hollande and Antonis Samaras, leader of the largest party  in Greece following the election votes, do not want to go down the austerity path.

Not a surprise really as we can see here in the recent local Government elections that being in charge of any Country that is having to tighten it's belt, not one notch but 5 or 6 at least, doesn't make you popular. 

"Growth" is a great rallying word to get the people onside but how that will be acheived in France remains to be seen. 

France has signed the recent austerity pact led by France and Gemany and Angela Merkel has said that this pact is not up for renegotiation, though that may be exactly what Hollande has in mind. They will be meeting later this month but it looks unlikely that they will form a relationship as strong as that of Merkel and Sarkozy, strong enough to be nicknamed Merkozy.

The resulting uncertainty of both election results will not be good for the Eurozone and the Euro in the short term with markets wondering if the recently signed Economic pact, that we did not sign in the UK, will last in it's current form.