Whither Europe: Greece’s center-right New Democracy party won 29.7 of the vote in parliamentary elections yesterday, claiming the 50-seat bonus for winning the most votes and positioning the party to form a coalition that would keep the country in the bailout-for-austerity agreement signed with European rescuers. Alex Tsipras’ Syriza party, which had promised Read More
Austerity plans will be reexamined after elections in France and Greece, though one country is more likely to adopt radical change. Not all MF Global clients were created equal when it comes to recovering funds from the failed derivatives broker. Buffett says his investment in Goldman Sachs was just peanuts. Read about it in today’s Wall Street roundup.
Change of tide? François Hollande defeated Nicolas Sarkozy, as expected, in a runoff election, installing as French president a socialist party leader who has promised to revisit austerity plans negotiated between Mr. Sarkozy and German Chancellor Angela Merkel. In Greece, voters shifted support away from political mainstays to extreme parties, placing the future of austerity in that country in question. The “bitter reality” of the European economic situation may preclude Mr. Hollande from straying too far from his predecessor’s path.
In Greece, on the other hand, the election results increase chances that the country will exit the euro to 50-75 percent, according to two Citigroup economists, though they say that a broad break-up of the monetary union is unlikely.
Zero Hedge has your guide to Europe for Dummies.
Preferred customers: Some MF Global clients have recovered holdings from the failed broker, while others have yet to see a dollar, the Wall Street Journal reports. The difference: where the clients invested their money. Funds invested in the U.S. have been at repaid 72 percent, but regulatory quirks leave those with money invested overseas waiting to recover funds.
Seeking allies: Reuters digs into the state of affairs at Ally Financial, “one of the least scrutinized bailouts of the financial crisis,” and hears that mortgage-lending unit ResCap may be placed in bankruptcy within the next week. Ally, meanwhile, has been the victim of competing interests internally and lax government oversight. With indications that General Motors and Chrysler are less likely to auto loans to Ally, the Treasury’s 74 percent stake in the company could lose value. Read More
François Hollande beat Nicolas Sarkozy to become the 2nd Socialist French president Sunday night. Mr. Hollande garnered nearly 52% of the vote compared to Mr. Sarkozy’s 48%. Mr. Hollande, who follows in the footsteps of the previous Socialist who led France for most of the 1980s, François Mitterrand, declared himself in a victorious speech “the president of the youth of France.” CBS reports Mr. Hollande’s platform targeted the austerity measures so hated by much of Europe. In a speech Mr. Hollande vowed to increase production, deficit reduction and preservation of equal access to public services.
President Barack Obama has reached out to Mr. Hollande after his win and has invited the president-elect to visit the White House. Read More
