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French president-elect Hollande promises 'kinder, gentler austerity' (+video)

As leader of Europe's No. 2 economy, French President-elect François Hollande has the power to challenge German Chancellor Angela Merkel's austerity doctrine. 

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The tide of pro-growth proposals has risen in recent weeks, with admonitions by the International Monetary Fund that austerity alone was harming Europe’s economic prospects, and, last week, an unexpected show of support for a growth pact by Mario Draghi, head of the European Central Bank.  

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The president of the European Commission José Manuel Barroso, said today that he agreed with Hollande’s desire for greater investment in Europe through EU budget funds and the European Investment Bank. “We clearly have a common objective in reviving the European economy to generate lasting growth which rests on solid basis and is a source of new jobs. We now need to transform these aspirations into concrete action," he said.

The departing Mr. Sarkozy is the latest EU leader to see his mandate fall in the face of unpopular austerity measures, following those in Ireland, Portugal, Spain, Italy, Greece, Romania, and the Netherlands. Minutes after polls closed yesterday at 8 p.m., Sarkozy said that he would not lead his party in critical parliamentary elections in June and that he is leaving politics in France entirely. 

It is the outcome in Athens that troubles European analysts monitoring the economic horizon. Some two-thirds of Greeks voted for extremist parties – the radical left Syriza at 16 percent and the neo-Nazi Golden Dawn at 7 percent.

The Greek vote throws into messy question Greece’s role in the eurozone. The Greek pro-EU austerity party New Democracy received 19 percent of the vote, but it has no clear partners with which to form a coalition and establish a majority. The next EU bailout loan for Greece is set for later this month, but with little political stability it is unclear how the terms of that deal will unfold. 

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