Can Merkel go it alone?

In a devastating blow for Angela Merkel, French presidential election favourite Francois Hollande's enthusiasm for renegotiating Europe's budget treaty could send her austerity efforts back to square one.

German Chancellor Angela Merkel may be close to scoring a major strategic coup in forcing Greece’s recalcitrant politicians to sign up to stringent budget cuts, but she’s becoming increasingly worried that France is about to fall off her austerity wagon.

Her biggest worry is the Socialist candidate, Franois Hollande, who at this stage looks almost certain to win the two-round presidential race in April and May, ousting the incumbent, Nicolas Sarkozy.

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