Where now for the Euro?

HAMISH_MCTAVISH

GREECE sent a sigh of relief through governments and financial markets around the world this morning by giving a narrow election victory to a party willing to stick to the country's economic bail-out agreements and defend the Euro common currency.

The German Government immediately signalled a willingness to soften the timing of Greece's loan repayments and the harsh austerity commitments under its 240 billion Euro bail-out agreements with the European Union and IMF.

Tough coalition bargaining will follow in the next few days but even if those talks fail New Democracy will be able to form a minority government and rule with the consent of Pasok, as the two mainstream parties were heading for a majority of up to 164 seats in the 300-seat parliament.

http://www.theaustralian.com.au/business/in-depth/pro-bailout-party-wins-greek-election-in-cliffhanger-poll/story-fnawdwo8-1226398211533

Also in the news, France had an election today....

France election: Francois Hollande and Socialists head for absolute majority

President François Hollande received a powerful mandate to champion growth in Europe and take on the German-led austerity drive last night as his Socialist Party headed for control of parliament with an absolute majority.

French prime minister Jean-Marc Ayrault welcomed the victory of his Socialist Party in legislative elections, saying:"The goal is to shift Europe towards growth and protect the euro zone from speculation. The task before us is immense".

After gaining control of the Senate and the presidency, the Socialists now wield more national power than ever before and the outcome means that Mr Hollande is unlikely to make major changes to his largely social democratic cabinet.

And the pressure from elsewhere keeps mounting......

World Bank head Robert Zoellick cited last week's "wasted" 100 billion euro ($125 billion) bailout of Spanish banks as an example of Europe's institutional shortcomings.

"To take your Spanish example -- it's actually 100 billion euros, and to have that as being a negative story? It's amazing. Why was it? It is because the delivery was extremely poor," Zoellick said. "So they took a very big bullet and they wasted it".

And the head of the Organisation for Economic Cooperation and Development, Angel Gurria, urged Europe to "take down the scaffolding" still clinging to its systems of governance and to deploy "awesome firepower" to cow the markets.

http://www.expatica.com/es/news/spanish-news/global-finance-chiefs-attack-europe-s-debt-response_234587.html

I suspect this story still has some way to run......

But it does seem Europe will be changing course and aiming more for growth sooner rather than later.