Elections in France, Greece and Germany have gone badly for the ruling parties. Prior to the elections the EC and ECB were hinting at the possibility of a growth pact to go alongside the austerity pact. But is it too little too late? The voters in Greece and France have granted power to anti austerity pact politicians. Certainly in Greece the electorate will expect action from the parties that have been elected.
How will the financial markets respond? The one thing the markets dislike above all others is political uncertainty. Now we have it in spades.
The EC is particular will be worried by the political change and the potential for major policy change.