Europe: the state of play

Now seven eurozone governments have been toppled since the crisis: France, Italy, Greece, Ireland, Spain, Portugal, the Netherlands. There is a palpable move, not just to the left, but to anti-austerity. What will be perceived as the Hollande effect is sweeping its way across the continent.

In Greece, the two main parties, centre left and centre right, had clung together in a coalition led by a Brussels nominee. Following the election they can no longer form a majority. The axis of Greek politics is no longer left - right but pro austerity - anti austerity.

In Italy people are asking why they must have austerity if France has rejected it. The PdL, the party started by Mr Berlusconi, which did badly in last weekend's regional elections, has said that it cannot support ratification of the fiscal pact unless the powers of the European Central Bank are widened to intervene in debt auctions and issue eurobonds. They have said they will force out Monti's government by the autumn.

Spain has said it has to do something about its banks, which have fantastically high bad debts, but of course hasn't the money to do it.

Ireland, seeing the Hollande effect, could fail to ratify the fiscal pact in a referendum.

So what are the mathematics? If we move from austerity to fiscal expansion, who will pay for it? The German economy is showing signs of slowing down, Merkel's coalition is weakening and they are unlikely to be in the mood to offer more generous terms to Greece or anyone else. Nor are they keen on printing more money, allowing these countries to pay their debts with devalued euros. Volker Kauder, one of Mrs Merkel's closest allies, has said 'Germany could end up paying for the Socialist victory in France with more guarantees, more money. And that is not acceptable. Germany is not here to finance French election promises.'

The majority view in Southern Europe seems to be that they want to stay in the euro but want to behave as they always have and the Germans to pay the bills. It may become clear quite soon that this is no longer an option.

It doesn't look good.