Over the past three years, the European Union has faced increasing austerity measures – like large-scale cuts in public spending, and increased taxes – in an effort to rein in mounting public debt. Germany, Europe's No. 1 economy, and France, its No. 2, were steadfast in backing austerity as the EU's path back toward a strong economic bloc. In fact, austerity measures are so associated with France's Nicolas Sarkozy and Germany's Angela Merkel that the leaders were often referred to as a packaged deal: Merkozy.
Yet many Europeans are tiring of the high unemployment rates, lost pensions, and in some cases, contracting economies that have accompanied austerity in the region. And as France entered a presidential election year, a Socialist Party candidate came to the fore calling for a new – and by some accounts improbable – approach to rescuing the eurozone.
François Hollande ran a victorious campaign that promoted a policy of blending growth policies into austerity measures, arguing that in order to recover, Europe needs investment as well as consumer and business spending. He also called for a more unified European approach, instead of relying so heavily on German-sourced solutions. He is the first socialist president to take France's presidency in 17 years, and for many he represents a new center-left influence in the region.
With talk of renegotiating economic pacts and softening austerity measures, Mr. Hollande represents a challenge to Mrs. Merkel's tough line on cutting spending – one that is bolstered by May 6's strong anti-austerity vote in Greece and growing anti-austerity demonstrations across Europe.