While everyone was focused on the election in Greece, another European country held elections that also may have far-reaching implications.
On Sunday, France put an exclamation point on May’s victory by François Hollande in the presidential election by giving an outright majority to his Socialist Party and their allies in the National Assembly, which is much like the House of Representatives.
The Socialists won 280 seats out of 577, and along with a few small allied parties, easily have more than 50% of the seats. The Socialists gained 94 seats since the last election, while the conservative UMP, the party of former President Nicolas Sarkozy, saw a precipitous drop of 119 seats.
This means that Hollande, who edged out better-known candidates to get the Socialist nomination, now appears to be in an unassailable position. He can get almost anything he wants through the legislature.
Hollande already has said he will fulfill a campaign promise and move back the retirement age for many French workers to 60; one of Sarkozy’s signature “reforms” was to raise it to 62. Hollande also has become a thorn in German Chancellor Angela Merkel’s side, breaking the famed “Merkozy” alliance, isolating Germany within Europe and pressuring Merkel to ease austerity for financially troubled countries like Greece and Spain.
But he also has the flexibility to make concessions to the European Union if France starts running into some of the same problems as Spain or Italy.
Already its debt has been downgraded and its financial condition is not expected to improve. France’s obligations as one of the pillars of the EU and the second biggest economy in the euro zone will only increase if it needs to chip in more aid to Spain or Italy. Its banks already look pretty vulnerable.
So, tough decisions may be ahead for François Hollande. Let’s see how solid his majority looks in, say, a year or two.