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France’s Sarkozy Faces Uphill Fight in May Runoff Election

April 23, 2012 at 12:00 AM EDT

RAY SUAREZ: A new wave of political and economic turmoil in Europe shook governments and stock exchanges today. The ruling coalition in the Netherlands fell, and the president of France faces an uphill fight in a runoff to retain his job.

In Paris and across Europe, all eyes were on Francois Hollande, now a major step closer to becoming the first Socialist president of France since 1995. Hollande landed 28 percent of the votes in Sunday’s first-round election that saw a turnout of more than 80 percent. He finished ahead of Conservative Nicolas Sarkozy. The incumbent president garnered 27 percent. The two will meet in a May 6 runoff election.

FRANCOIS HOLLANDE, French presidential candidate (through translator): I’m going to do exactly as I did in the first round. I’m going to gather all the French people who want change.

NICOLAS SARKOZY, French president (through translator): This campaign must be about the truth. This is a crucial moment. The French people need to have all the facts so they can choose. And I won’t be running away from it or hiding from it.

RAY SUAREZ: But Sarkozy faced deep discontent over France’s debt and high unemployment. Hollande calls for less austerity and more focus on economic growth. The voter unhappiness fueled far-right leader Marine Le Pen as well. She won nearly 18 percent, vowing to quit the euro currency system and curb Muslim immigration.

MARINE LE PEN, leader, French National Front Party (through translator): When I heard this morning that certain people were talking about a protest vote, I find that particularly rude in regard to our supporters. Just because they are for more national protectionism, it is because they want less immigration, it is because they want security problems resolved.

RAY SUAREZ: Economic worries and disillusionment with deficit cuts also drove the Dutch government into collapse today. Prime Minister Mark Rutte and his cabinet resigned after the far-right Freedom Party balked at backing a new austerity package.

GEERT WILDERS, leader, Netherlands Freedom Party (through translator): It’s not just the purchasing power for the elderly or less economic growth or unemployment figures rising as a direct result of the $18 billion in cuts. No, it’s the whole thing. We just don’t want it.

RAY SUAREZ: Meanwhile, new economic data showed Spain has fallen back into recession just two years after emerging from the last one. And the European Union reported the picture for the entire Eurozone is mixed, at best.

The 17 countries using the euro saw their average deficits fall to just over 4 percent of economic output in 2011. But their overall debt rose to 87 percent of output, the highest level since the euro’s creation in 1999.

It all weighed heavily on European markets today, as major indexes fell 2 to 3 percent. In part, traders fretted about what will happen in France if the longtime Socialist Party leader, Hollande, wins, as polls suggest he will. He said he wants to renegotiate a European treaty designed to limit excessive government spending as a way of spurring growth.

Up to now, France, under Sarkozy, has joined with Germany to push other countries for fiscal restraint and spending cuts.