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Monday, May 7, 2012

Biden on Gay Marriage: 'Absolutely Comfortable With Men Marrying Men, Women Marrying Women'

Syria's Muslim Brotherhood rise from the ashes

At a meeting of Syria's opposition, Muslim Brotherhood officials gather round Marxists colleagues, nudging them to produce policy statements for the Syrian National Council, the main political group challenging President Bashar al-Assad.

With many living in the West, and some ditching their trademark beards, it is hard to differentiate Brotherhood from leftists. But there is little dispute about who calls the shots.

From annihilation at home 30 years ago when they challenged the iron-fisted rule of Hafez al-Assad, the Brotherhood has recovered to become the dominant force of the exile opposition in the 14-month-old revolt against his son Bashar.

Careful not to undermine the council's disparate supporters, the Brotherhood has played down its growing influence within the Syrian National Council (SNC), whose public face is the secular Paris-based professor Bourhan Ghalioun.

"We chose this face, accepted by the West and by the inside. We don't want the regime to take advantage if an Islamist becomes the Syrian National Council's head," former Brotherhood leader Ali Sadreddine al-Bayanouni told supporters in a video.

The footage is now being circulated by Brotherhood opponents, seeking to highlight its undeclared power.

"We nominated Ghalioun as a front for national action. We are not moving now as Muslim Brotherhood but as part of a front that includes all currents," said Bayanouni.


The Syrian Brotherhood is a branch of the Sunni Muslim movement founded in Egypt in the 1920s. It was a minor political player before a 1963 Baath Party coup but its support grew under the authoritarian 30-year rule of Hafez al-Assad, as his minority Alawite community dominated the majority Sunni country.

Mindful of international fears of Islamists taking power, and of the worries of Syria's ethnic and religious minorities, the Syrian Brotherhood portrays itself as espousing a moderate, Turkish-style Islamist agenda. It unveiled a manifesto last month that did not mention the word Islam and contained pledges to respect individual rights.

With backing from Ankara, and following the political ascendancy of the Brotherhood in Egypt, Tunisia and Libya since Arab Spring revolts broke out two years ago, the group is poised to be at the top of any new governing system in Syria.

Extending the loose Brotherhood umbrella to Syria will raise pressure on the U.S.-backed Hashemite monarchy in Jordan, where the local Brotherhood has been sidelined by laws that favor tribal politicians allied with the security apparatus.

Iraq's Shi'ite rulers could also find they have a hardline Sunni government as their neighbor, and Lebanon's Shi'ite guerrilla group Hezbollah would lose its main Arab backer.


Working quietly, the Brotherhood has been financing Free Syrian Army defectors based in Turkey and channeling money and supplies to Syria, reviving their base among small Sunni farmers and middle class Syrians, opposition sources say.

"We bicker while the Brotherhood works," said Fawaz al-Tello, a veteran opposition figure who is a pious Muslim while being on the liberal end of the Syrian political spectrum.

"They have gained control of the SNC's aid division and the military bureau, its only important components," said Tello, a former political prisoner who fled Syria four months ago.

"But they still have to work more do to get support on the inside. Lots of clerics, activists and rebels do not want to be linked to them."

Tello, however, acknowledged that the Brotherhood has clawed back influence inside Syria, especially in the cities of Homs and Hama and the rural province of Idlib on the border with Turkey, hotbeds of the revolt against Assad.

This is no small feat after three decades in the political wilderness. Unlike Arab rulers who tried to co-opt the movement by granting it limited operation, the Assads excluded it and all other opposition from the political system.

Bashar's father Hafez al-Assad's forces killed, tortured and imprisoned tens of thousands of people after leftists and Islamists began challenging his rule in the 1970s.

The Brotherhood took the brunt of the repression, and a 1980 decree singled out membership as punishable by death.

Mulhem Droubi, educated in Canada and one of a younger generation of Brotherhood leaders, said the group is not primarily concerned with political prominence.

"We are a party that presents moderate solutions. We are not extremists, neither to the left nor to the right and our program is the most accepted by the Syrian street," he said.

"We are working for the downfall of Bashar al-Assad and not to find a popular base. We leave competition for the future in a free Syria," the softly spoken Droubi told Reuters.

Droubi, however, acknowledged that the road to democracy will be even more bloody, adding that the Brotherhood began supporting armed resistance in earnest a month ago.

The issue sharply divided the group in the 1980s, when it took up arms against the president. Assad's forces killed nearly 20,000 people when they overran the city of Hama in 1982, where the Brotherhood's armed division made it last stand.

Droubi said there is no dispute now about the need for armed resistance, alongside street protests against Assad.

"Too many of our people have been killed. Too many have been raped," Droubi said, adding that Brotherhood was committed to a setting up a multi-party democracy if Assad is toppled.

Droubi pointed to a political program unveiled by the Brotherhood last month in Istanbul, which committed to multi-party democracy in a future Syria. It said a new constitution would be reached through consensus and guarantee fair representation for diverse ethnicities and religious groups.

"Our proposals are more advanced than the Brotherhood in other countries," he said.

Bassam Ishaq, a Christian opposition figure who has worked with the Brotherhood within the SNC, said the manifesto bore the marks of the Brotherhood's pragmatism.

"If they get a chance to seize power by themselves they will do it, but they realize that it will be difficult in country where 30 percent of the population are ethnic or religious minorities," said Ishaq.

"The street has lost faith in leftist politicians. After the repression in the 1980s, the leftists dispersed. The Brotherhood kept together and rebuilt while in exile, aided by donations from wealthy Syrians in and support in the Gulf," he added.

In a demonstration of their financial muscle, Brotherhood operatives were dispatched last month with suitcases of cash to a dusty camp for Free Syrian Army defectors in a Turkish region bordering Syria near Antakya.

Sources in the camp said the Brotherhood was supporting Colonel Riad al-Asaad, one of the first prominent defectors last year, now at odds with more senior officers who deserted later.

Colonel Asaad now sports a Brotherhood-style beard. Street activists who have had little to do with the Brotherhood are also being lured by promises of instant support for the revolt.

"I approached them and they instantly gave me 2,000 euros when I asked for help...and I am not even Ikhwan (Brotherhood)," said veteran activist Othman al-Bidewi, who regularly travels between Syria and the border region in Turkey to drum up support for street demonstrations against Assad in Idlib province.

Hollande wants to end dollar era, will clash with US

Syria Moving Scuds to Israel, Turkey Borders

Jordanian news site Ahbar Baladnareports that western spy satelliteshave recently spotted movements of Syrian heavy missile launchers northward and southward, toward Syria's borders with Turkey and Israel.

The site says hundreds of high-caliber launchers are being moved, and that these could only be long range Scud missile launchers.

Syria has threatened in the past that in the event of foreign military intervention on its soil, it will not hesitate to fire missiles at Israel and Turkey in order to ignite a large scale regional war.

Turkish and French officials said ten days ago they were mulling a potential military intervention in Syria, where civil war has been raging for 14 months.

“In the face of developments in Syria, we are taking into consideration any kind of possibility in line with our national security and interests,” Turkish foreign minister Ahmet Davutoglu told parliament during a briefing to lawmakers.

Israel National News

Netanyahu holding elections so he is free to deal with Iran in September-October

Israel’s Prime Minister Benjamin Netanyahu is calling early elections so that he and his government will be free to deal with Iran’s nuclear program this September-October, one of Israel’s best-informed political commentators said on Friday night.

Netanyahu is set on Sunday to announce that he is dissolving parliament and calling elections for September 4 — a year ahead of schedule. In the weeks immediately after that vote, said well-connected commentator Amnon Abramovich on the top-rated Channel 2 news, Netanyahu will head a transition government at home and have no need to worry about voter sentiment, and he knows that President Barack Obama will be paralyzed by the US presidential campaign.

Netanyahu has shocked the nation in the past few days by indicating that he will be calling elections a year ahead of their scheduled date in October 2013, leaving analysts baffled as to his reasoning. Speculation has focused on differences among the various coalition parties over legislation on national service for ultra-Orthodox Israelis, and over elements of the national budget.

But Abramovich said that the dramatic decision to bring the elections forward relates to Iran. After the September elections, which all polls show Netanyahu winning easily, he will head a transition government for several weeks while a new coalition is formed. During that period, Netanyahu “will not be beholden to the voters,” and will be free to take decisions on Iran that many Israelis might not support, Abramovich said.

Furthermore, he will still have his trusted Defense Minister, Ehud Barak, at his side. Barak is seen as unlikely to fare well in the elections, and may not even retain his Knesset seat, but would retain the defense portfolio until a new coalition is formed.

And finally, said Abramovich, the September-October period would see Obama, who has publicly urged more patience in allowing diplomacy and sanctions to have their impact on Iran, in the final stages of the presidential election campaign, with a consequent reduced capacity to try to pressure Israel into holding off military intervention.

Obama, “on the eve of elections, won’t dare criticize Israel,” said Abramovich. From Netanyahu’s point of view, “the conditions would be fantastic.”

He noted that a transition government is prevented by law from taking dramatic policy decisions — except in critical circumstances, and drew attention to comments from Barak in a newspaper interview Friday in this regard.

“The political-security system will make decisions as needed, even under challenging circumstances,” said Barak about the impact of elections. “We must separate the issue of Iran from the subject of elections.”

Barak also said of the Iranian nuclear drive: “The moment of truth is approaching.”

Netanyahu has been repeatedly drawing parallels in recent weeks between the Iranian nuclear threat to Israel and the Holocaust, has said sanctions are not working, and warned that he will not allow Israel to have to live in the shadow of “annihilation.”

He has also indicated that a decision on military intervention in Iran will have to be taken within months.

Barak, for his part, has stated repeatedly that confronting Iran before it achieves a nuclear weapons capability, however complex, will be far less challenging a prospect than confronting a nuclear Iran.

In the interview Friday with the Israel Hayom daily, Barak recalled a speech given in 2003 by the then-Iranian president Ali Akbar Hashemi Rafsanjani, who, said Barak, spoke of Israel as being “so small and vulnerable that it is a ‘one-bomb’ nation.

“If one bomb were dropped on it, this nation would not return to its former glory,” Barak quoted Rafsanjani as saying. “After the exchange of blows, Rafsanjani said, Islam would remain and Israel would not remain as it was. He also noted that there need not be any clear markers on the bomb as to where it came from. It could be transported in a shipping container that arrives at some port and simply explodes.”

Added Barak: “I do not delude myself. The moment of truth is approaching. We have to decide what to do about this if the sanctions and diplomacy fail…

“Some say let’s trust the world… I say that in the end we can deal with Iran now or deal with a nuclear Iran that poses a far greater danger… If it obtains a nuclear weapon, it will be very hard to bring it down. Now they are trying to seek immunity for their nuclear program. If they achieve military nuclear capability, for arms, or a threshold in which they can assemble a bomb within 60 days, they will acquire another form of immunity – for the regime.”

Barak recalled Israel being caught off guard in 1973, when it was attacked in the Yom Kippur War and sustained heavy losses. “What happened in 1973? The entire cabinet was blinded and we were forced to pay the price on the battlefield.”

The defense minister also used the interview to castigate several ex-intelligence chiefs and former prime minister Ehud Olmert, who have criticized what they argue is the government’s misguided handling of the Iranian threat, and who have warned that the Netanyahu-Barak duo may be leading Israel into a regional war with dire potential consequences.

Said Barak: “You can trust me when I say this: In the history of the state, there has never been such as orderly decision-making process.”

The Times of Israel

Making organ donation a thing of the past

This is a nose we’re growing for a patient next month,’ Professor Alexander Seifalian says matter-of-factly, plucking a Petri dish from the bench beside him.

Inside is an utterly lifelike appendage, swimming in red goo. Alongside it is another dish containing an ear.

‘It’s a world first,’ he says smiling.

‘Nobody has ever grown a nose before.’

His lab is little more than a series of worn wooden desktops strewn with beakers, solutions, taps, medical jars, tubing and paperwork, and looks like a school chemistry lab.

But it’s from here that Seifalian leads University College London’s (UCL) Department of Nanotechnology and Regenerative Medicine, which he jokingly calls the ‘human body parts store’.

Seifalian and his team are focusing on growing replacement organs and body parts to order using a patient's own cells

As he takes me on a tour of his lab I’m bombarded with one medical breakthrough after another.

At one desk he picks up a glass mould that shaped the trachea – windpipe – used in the world’s first synthetic organ transplant.

At another are the ingredients for the revolutionary nanomaterial at the heart of his creations, and just beyond that is a large machine with a pale, gossamer-thin cable inside that’s pulsing with what looks like a heartbeat. It’s an artery.

‘We are the first in the world working on this,’ Seifalian says casually.

‘We can make a metre every 20 seconds if we need to.’

‘Other groups have tried to tackle nose replacement with implants but we’ve found they don’t last,’ says Adelola Oseni, one of Seifalian’s team.

‘They migrate, the shape of the nose changes. But our one will hold itself completely, as it’s an entire nose shape made out of polymer.’

Looking like very thin Latex rubber, the polymer is made up of billions of molecules, each measuring just over one nanometre (a billionth of a metre), or 40,000 times smaller than the width of a human hair. Working at molecular level allows the material itself to be intricately detailed.

‘Inside this nanomaterial are thousands of small holes,’ says Seifalian.

‘Tissue grows into these and becomes part of it. It becomes the same as a nose and will even feel like one.’

When the nose is transferred to the patient, it doesn’t go directly onto the face but will be placed inside a balloon inserted beneath the skin on their arm.

After four weeks, during which time skin and blood vessels can grow, the nose can be monitored, then it can be transplanted to the face.

At the cutting edge of modern medicine, Seifalian and his team are focusing on growing replacement organs and body parts to order using a patient’s own cells. There would be no more waiting for donors or complex reconstruction – just a quick swap.

And because the organ is made from the patient’s own cells, the risk of rejection should, in theory, be eliminated.

Read more: http://www.dailymail.co.uk/home/moslive/article-2138956/Organ-donation-Making-thing-past--British-lab-growing-human-spare-parts.html#ixzz1uBqF2cir

Greece will most likely not have an active government in May 15th when €430 millions in bonds mature

The Greek elections culminated with the worst possible outcome: 2 votes short of a majority for the pro-bailout New Democracy and Pasok parties. So what happens next? Well - two things: expect to see random stop hunting ramps in the EURUSD and ES on false rumors that despite the math, a pro-bailout coalition government is being formed. 

It isn't, but it will take out all FX and ES stops to the upside first as skittish shorts get burned as usual on planted fake headlines. More importantly, and as predicted last week, we will likely see yet another Greek election as the political vacuum in Athens is likely too big to be circumvented in a few days. Below we present a summary of immediate next steps as summarized by the WSJ. 

Yet one thing we want to bring attention to is that as we pointed out first on Saturday, a key even over the next two weeks, during a time when Greece will most likely not have an active government in place is the May 15th maturity of €430 million in international-law bonds whose holders have not agreed to the terms of the PSI and thus demand full payment... of money that Greece does not have. Finally we already know that Norway is the biggest non-PSI compliant entity out there. 

So will we finally see the first Greek PSI-related lawsuit on May 16 if and when Greece fails to make a payment? We will know in 9 days whether the European soap opera gets even more exciting than usual as various European countries start suing each other in international court, especially when one of the countries will have no government for the foreseeable future.

From the WSJ:

TIMELINE: This is what the next few days will look like.

May 7-May 9: New Democracy’s Antonis Samaras seeks coalition government

May 10-May 12: Syriza’s Alexis Tsipras tries his hand at building coalition if Samaras fails

May 13- May 15: If both have failed, Pasok’s Evangelos Venizelos gets the mandate to start coalition talks

May 16: President of the Republic invites leaders of the seven parties that have made it into parliament in final effort to cobble together coaltiion.

May 16 or soon after: If that final effort fails, a caretaker government is appointed t o lead the country to elections.

June 10: Is the earliest date that fresh elections can be held if all previous steps have failed.

June 30: Deadline by which Greek parliament must approve €11.5 billion in further cutbacks to deal with expected budget gaps in 2013 and 2014 under its bailout plan agreed with the Troika of its international lenders.

Until a new government is formed and a new prime minister sworn in, Lucas Papademos, Greece’s technocrat caretaker prime minister will remain in his position. However, Papademos’ government cannot legislate as parliament was dissolved ahead of the elections.

And in detail:

THE MANDATE: Antonis Samaras today will receive a so-called exploratory mandate from President of the Republic Karolos Papoulias, whose role is largely ceremonial. This means he has three days to form a government. Mr. Samaras yesterday invited “all pro-European parties” to unite forces under his leadership to “keep the country in the euro” and “modify” the economic policies attached to Greece’s bailout program. That implies he’s likely to hold talks with most parties that have made it into parliament, apart from the neo-nazi Golden Dawn and the Communists who are both categorically anti-Europe.

If Mr. Samaras fails, the president will call on Alexis Tsipras, leader of Syriza, to try and form a government. Mr. Tsipras had called upon all left-wing parties to join forces before the election and will do so again now. In his address on Sunday evening following the results, he said he would do the same when the exploratory mandate reached his hands. He too will have three days to build a government.

If Mr. Tsipras fails, the exercise will be repeated by Evangelos Venizelos, the leader of socialist Pasok, which was the winner of the 2009 election and the party that oversaw the country’s bailout program and its debt restructuring. Mr. Venizelos Sunday said he too wanted a pro-Europe coalition.

If none of the three is able to form a coalition government, the president will call the leaders of all the parties in parliament together for one last stab at a cross-party coalition. But if that fails, too, the president and the party leaders are tasked with cobbling together a caretaker government that will lead the country to fresh elections.

If the party leaders can’t even agree on a caretaker prime minister (this has happened once before, in 1989) the president appoints the chief justice of either Greece’s Supreme Administrative Court, the Supreme Court, or the Court of Audits, to take the reins and lead the country to elections.

However in all of this, pay particular attention to May 15. This is what we said previously:

Unlike Belgium, it is unlikely that Greece can persist under anarchy, especially with another critical event coming due: a €430 million payment on an international law bond that matures on May 15, and whose owners have held out from the PSI process (remember that? apparently not all has been swept under the rug). In fact we now know that the Norwegian sovereign wealth fund could very well be the entity that will demand payment and when it doesn't get it will promptly proceed to sue Greece.

And a good just issued summary from Peter Tchir on precisely this issue:

In a world full of unintended consequences (where unintended invariably means bad) the profile of the Greece’s debt is interesting.

Greece currently has €220 billion of debt outstanding. That will grow as part of the “bail-out” but since the bank recapitalization isn’t done, and other money has been held back, the amount is smaller than the final projected amounts.

Troika loans are about €77 billion of this amount. These loans have stricter language and will be hard for Greece to do much about.

Of the €142 billion in bonds, at least €50 billion are the ECB’s holdings (remember, they have been getting paid off on bonds as they mature). This amount should draw the attention of the newly elected Greek government. While the Troika loans may be tough to walk away from, these bonds, held as part of an ill-advised secondary market purchase program would be a nice target for more debt reduction. In fact, it looks like over €3 billion is due to go to the ECB this month. Think about that. This newly elected government has to borrow €3 billion from the ECB to pay back the ECB?

It has to be tempting to renegotiate with the ECB and make them take some share of the losses (especially since they have been earning interest, getting paid par on bonds already matured, and didn’t pay par for these bonds in the first place). This disagreement between Greece and the ECB is why the ECB has not been involved lately in the secondary markets recently, and why that role is being pushed onto the EFSF and ESM (if and when that is implemented). Watch this.

Of the €90 billion or so of private sector held bonds, the €450 million due on May 15th are particularly interesting to watch. An actual default on these could lead us right back to the “disorderly” default scenario that so many people were afraid of. Although I don’t think a default would be a disaster, much of the market thinks it would, so I suspect Greece will pay off these holders. The next maturity isn’t until June 2013, so I’m guessing all parties will suck it up and pay these holders out so they can put off more decisions for a bit. What that does to the game theory analysis when other countries start their own PSI, I have no idea, but suspect it doesn’t make it easier for countries to achieve their goals.

Zero Hedge

Peru coast littered with dead birds and dolphins

The government of Peru has warned people away from beaches along the country's northern coast due to the hundreds of dead birds and dolphins that have washed up on shore.

More than 1,000 dead birds, a majority of them pelicans, and hundreds of dead dolphins have washed up in recent weeks.

The alert did not shut down beaches, but local officials were warned to wear protective gear such as gloves and masks when handling the dead animals.

While initial examinations of the dolphins indicate their deaths may have been triggered by a virus — similar to an outbreak that occurred in Peru among marine animals in the past — the pelican deaths remain a mystery.

The Agriculture Ministry told the Reuters news agency that preliminary tests on some dead pelicans have indicated malnourishment. Oscar Dominguez, head of the ministry's health department, said experts had ruled out bird flu.

A similar mass death among pelicans along Peru’s coast in 1997 was blamed on a shortage of anchovies due to the El Nino weather phenomenon, which shifted shoals of anchovies away from the coastline.


Markets rely on Fundamentals not short term News

Peter Schiff: We aren't that far behind Greece

Protesters clash with Moscow police at 'March of Millions'

France elections 2012: François Hollande victory sets EU on course for turmoil

On the same day in Greece, neo-Nazis entered the country’s parliament after national elections that wiped out mainstream parties that had supported austerity measures imposed by the EU.

Accepting his mandate as French president, Mr Hollande threw down the gauntlet to Angela Merkel, the German chancellor, who has made austerity policies a condition of euro membership.

“Europe is watching us. The moment that I was announced president, I am sure in many European countries there was a relief, hope at the idea that at last austerity is no longer inevitable, and my mission is to give to European construction the dream of growth,” he said.

“Europe is watching us, austerity can no longer be the only option.”

His words, just after inflicting a humiliating defeat on Mr Sarkozy, previously the Chancellor’s closest ally, are a call to arms against the economic policies that Germany has enshrined in a eurozone “fiskalpakt” treaty.

Mrs Merkel was quick to call and congratulate Mr Hollande, inviting him to Berlin “as soon as possible” for talks.

“It is a thunderclap for Europe,” said Arnaud Montebourg, a senior Socialist likely to enter the Cabinet. “This shows that the Europe of austerity must be turned into a Europe of growth.”

Ed Miliband, the leader of the Labour Party, also hailed the French Socialist victory as a development that would weaken the Conservative-led coalition.

“This new leadership is sorely needed as Europe seeks to escape from austerity. And it matters to Britain,” he said.

Greek elections have also delivered a hammer blow to the eurozone’s austerity policies after over 60 per cent of the vote went to far-Left and Right-wing parties opposed austerity measures that are a condition of an EU-IMF bail-out and Greek membership of the euro.

In Greece, it appeared last night that centrist New Democracy and Socialists were denied a combined majority leaving the country ungovernable as a minority government tries and pass a new raft of austerity measures.

The latest crisis could cause the collapse of a €105 billion (£90 billion) EU-IMF bail-out deal, meaning that Greece would have to leave the euro. Neo-Nazi Golden Dawn MPs will now enter the Greek parliament for the first time since the end of the military dictatorship in 1974.
The combination of both results was expected to upset markets and increase pressure on the euro as investors today get their first chance to react to the prospect of uncertainty. The early signs were ominous as the Asian markets registered an immediate drop in the euro when they opened this morning.

In a bad night for Mrs Merkel, her ruling Christian Democrat party suffered a major setback in regional elections, scraping a one-point lead over resurgent Social Democrats allied to Mr Hollande.

The anti-austerity movement across Europe is a huge challenge to Germany and its economic doctrine of austerity that until last night has ruled supreme with the support all of Europe’s leaders, the EU, European Central Bank and financial markets.

After the French and Greek votes that consensus has been shattered at a time when Europe’s economies are plunging further into recession, leaving little room to manoeuvre for governments.

Mr Sarkozy became the 11th European leader to fall foul of the economic crisis since 2008 in a catastrophic result for the French Right. He was ousted from the Elysée after just one term in the worst setback for the centre-Right for over 30 years and lost crucial votes to the National Front.

The “silent majority” that Mr Sarkozy repeatedly swore would “submerge” his Socialist rival and all those who predicted he stood no chance, failed to speak up at the 11th hour.

“The French people have made their choice … François Hollande is the president of France and he must be respected,” he said in a speech to supporters.

“I wish him good luck, it’s going to be difficult.”

In a move that will heighten warfare within his party, he said: “I will become a Frenchman among Frenchmen”, adding that he would not lead the centre-Right in forthcoming parliamentary elections.

On Sunday night Mr Hollande had won 51.56 per cent of the vote compared to Mr Sarkozy’s 48.41 per cent with 90 per cent of the ballots counted.

Over 100,000 jubilant supporters gathered at Paris’s revolutionary Place de la Bastille, a pilgrimage site for the Left, chanting “François President”.

Many were too young to remember that it was here that a gigantic crowd gathered for the 1981 victory of the last Socialist president, François Mitterrand.

But even as the festivities got under way, officials close to both Mr Hollande and Mr Sarkozy were fearful of a market backlash against the Socialist’s plans to tax the wealthy and expand jobs in the state sector.

There are concerns that Mr Hollande will be unable to respect fiscal discipline targets while enacting a tax — and-spend programme that would see him create 60,000 more state education posts, partly revoke a pension reform and slap a 75 per cent tax on millionaire owners.

A senior Conservative source told The Daily Telegraph that fears France was about to reverse course would cause turmoil and uncertainty.

He said: “Clearly it’s going to focus a lot of market attention on the French public finances, which are nothing to write home about. I don’t think it is going to make life in the bond markets any easier next week.

“We haven’t chosen austerity because it’s fun. We have to do austerity, and so does France.

“He will have to be very careful about his public spending commitments and the lack of welfare reform.”

David Cameron, the Prime Minister who had given his backing to Mr Sarkozy, called Mr Hollande to congratulate him on his victory. “They both look forward to working very closely together in the future,” said a Downing Street spokesman.

The Telegraph

The Truth Behind the Unemployment Numbers + Stimulus vs Austerity