Re: Socialist Francois Hollande defeats Nicolas Sarkozy
Economically, it is partially true that the change in French government 'could' cause more spending to provide for additional handouts however, there are limits as to how far it can go. The European Union and all Euro countries combined are locked into a treaty that limits the allowed deficit as a percentage of GDP. Germany missed that a couple times during the assimilation of East Germany, but only by a small margin. Greece and Italy have also blown it a little a couple times. Overall though, no Euro country is allowed to let it get out of control. France can not just go ahead and print 3 trillion more Euros all by itself. The only avenue really for increasing cash to the government is by increasing taxes.
As far as the Euro goes, this could cause a dip in the rate against the dollar - which for the US isn't a really good thing since it raises the cost of goods imported from the US. Overall though, the USD is currently quite a bit below where the Europeans would like it to be - caused by the US overspending and the financial problems that happened here with the sub-prime fiasco and massive financial institution losses. If the US government continues the current trend, the deficit will double or triple in not so many years and the dollar will eventually be like the Russian Ruble (i.e. toilet paper) as far as value goes. Then we can all get prepared to take a wheelbarrow full of money to the grocery store for a loaf of bread.
The entire concept in creating the Euro as a European zone currency was to have a currency that was effectively on par with the dollar. In the initial phase of the Euro launch, the value was set artificially high then allowed to fall to a level of equilibrium. Once that was reached, the Euro was at about 1.1-1.3 $ and there it pretty much stayed - until Iraq and trillions spent that the US didn't have.
As for Britain, none of the Euro constraints apply. Britain is not a Euro country - they still have the British Pound. So, Britain could go ahead and print 3 trillion pounds which would drive the value of the currency down substantially - except for one little glitch. The British Pound is pegged to the Euro at a certain rate and not allowed to fluctuate very much against the Euro. If Britain were to simply ignore that agreement they have, they would lose all the EU kickbacks they get which is something they won't jeopardize.