23.04.2012
By Simon Miller
Poltical pressures in the eurozone has hit European markets this morning following the first round of the French presidential elections and Dutch budget talks breaking down.
Both the EURO STOXX 50 and CAC 40 are trading down - 2,264.08 and 3,137.20 respectively - while the FTSE 100 was trading down 47.19 at 5,684.91 (10.00 BST).
The Euro is down across the board and is currently trading 0.29% down against the pound at 0.8176 and down against the dollar at 1.3159.
The negative action happened after the talks over a Dutch austerity budget broke down and President Sarkozy came second in the first round of the presidential elections.
Geert Wilders walked out of talks over a €16bn round of cuts needed to meet austerity targets on Saturday and called for elections to be held as soon as possible as he couldn't allow the Dutch people to "pay out of their pockets for the senseless demands of Brussels".
As a result, Prime Minister Mark Rutte is expected to hold an emergency cabinet meeting and step down, potentially derailing the eurozone rescue debt plan.
Deputy foreign minister Ben Knapen told reporters: "I assume it is inevitable. It is important that everyone who bears responsibility stays calms and makes sure we get an orderly budget. We do have big problems."
Meanwhile, President Sarkozy has come second to socialist leader Francois Hollande in the first round of France's presidential election.
Hollande won 28% of the vote in the first round on Sunday, beating Sarkozy's 27%.
Hollande had vowed to tear up the eurozone stability pact but has since tempered his language during the election campaign.
French ten-year debt yields rose to 3.106% this morning while Dutch debt spreads are edging to a record with five-year credit default swap widening to 132 basis points, four basis points off its record wide of 136bp hit in November.
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