During a roundtable discussion on elections last night here at Surrey, I was asked what the impact would be of Hollande’s election on the existing European-level agreements on austerity.  After some metaphorical beating around the bush, I replied that I thought the impact would be marginal, akin to a child who gets some crayons and is allowed to draw a pretty picture while the grown-ups get on with the real business.

After some reflection, I would I still stand by this.  Franceis not the EU’s leader anymore, whatever its politicians say, and in the face of broad German popular support for the austerity agenda it’s very hard to see the current coalition in Berlin giving any ground on the matter.  Even the poor showing in Nordrhein-Westfalen this week won’t change that.

However, I can concede that kids with crayons have their value.  In particular, if we assume that Merkel needs to present at least some kind of common position with Hollande if eurozone policy is not to completely dry up, then there could be a positive effect of letting le petit François make the Fiscal Pact and the austerity packages look a bit more attractive, even as the Greeks, the Irish and the rest have to swallow them down.  Even a cosmetic addition of a growth package – long on words, short on substance – would be symbolically important, giving Hollande something to take back home, and giving any new Greek coalition the leeway to move on to the next tranche of aid.

Part of the problem is clearly that there is no strong leadership from any quarter, national or European.  From a sniping UK to a sanguine EU President to Merkel’s inflexible stance, there has not been a direction of travel, only of drift.  Kid’s drawings might put a passing smile on one’s face but they do not make for a broad policy position on macroeconomics.  Indeed, Hollande’s lack of joined-up thinking on economic policy further reinforces the impression that he is going to be a pragmatist, in an effort to avoid a repetition of François Mitterrand’s socialist missteps in the early years of his presidency.In the longer term, all this might open the door to a more fundamental swing towards growth, especially if the eurozone crisis can be contained and recession halted.  Those are very big preconditions that do not appear to be in hand at all at the moment, especially if things fall apart in the next couple of months (e.g. an Irish no vote, a proper run on Greek banks, an anti-austerity coalition in Greece, etc.).  For now, we might ask François to look in his colouring box to find some orange, to draw some carrots to match the huge sticks that his big sister has already put there.