The European sovereign debt problem that began with Greece has entered a new phase. In addition to the ruling party's defeat in polls Greece held May 6, Nicholas Sarkozy, who helped champion fiscal austerity as the cure for the crisis, was replaced as French president by Francois Hollande, a Socialist who has called for greater emphasis on growth.
These two election results are threatening to create a new split in economic policy among the eurozone governments and have raised the spectre of Greece exiting the common currency.
An informal summit of EU leaders held in Brussels on May 23 — the first one attended by Hollande — failed to come up with a clear response to the situation.