Analysis: Sarkozy hit by crisis, Merkel strong

German chancellor Angela Merkel says the Merkozy treaty is not renegotiable. There is just one "slight" hitch: France has not signed the treaty and will not sign the treaty unless it is reworked says François Hollande who on May 6 will in all likelihood replace Nicolas Sarkozy as president of France. Moreover, Hollande's demands have gotten steeper and steeper as he inches closer to election.

German Chancellor Angela Merkel was forced to size up her election-year strategy Monday after a bitter defeat to the centre-left opposition in a cliffhanger state poll. In one of the tightest state races in recent memory, the Social Democrats and the Greens Sunday eked out a one-seat majority in Lower Saxony over the incumbent coalition of Merkel's Christian Democrats with the Free Democrats.

French president-elect François Hollande has launched a preemptive attack blaming outgoing president Nicolas Sarkozy for the huge budget deficit of France. Given Hollande wants to tax millionaires 75%, I find it quite ironic that Hollande blames the problem on "hidden taxes" of Sarkozy. Please consider Brussels raises alert over French deficit

The EU Observer reports France to hold jobs summit as unemployment hits 12-year high A sharp rise in France's unemployment figures is putting pressure on President Nicolas Sarkozy to deliver, with over half the French population wanting the candidates for the spring presidential election to focus their energies on maintaining jobs.

In a move sure to raise the ire of French President Nicolas Sarkozy, British Prime Minister David Cameron says French banks would come to Britain to avoid tax. In comments aimed squarely at Nicolas Sarkozy after the French president reportedly criticised British industry, Cameron said the concept of the tax at a time of economic difficulty was "mad" and "extraordinary".

As expected Francois Hollande and incumbent Nicolas Sarkozy will square off on May 6 in round two of the French presidential elections. However, there was a huge surprise in spot number 3 as extreme right wing candidate Marine Le Pen pulled in 18% of the vote running on a dump-the-euro platform. First Round Totals Hollande: 28.6% Sarkozy: 27.1% Le Pen: 18% Please consider Le Pen voters to arbitrate Hollande-Sarkozy duel