Sunday was a busy day in Europe, which is already hitting markets overseas. First, so far the Greeks have been unable to build a new coalition government after last week's elections that saw voters essentially toss out politicians that voted for austerity.
The fear that Greek politicians may not be able to put together a unity government is a significant concern. Essentially leaders of the different political parties that might make up a coalition government are sticking to their guns on the austerity plan - essentially they want to end it.
According to wire reports the parties that support austerity now lack enough seats in Parliament to run the country. Without the support of the new winning parties, that could be a challenge. And leaders of groups like Coalition of the Radical Left and others say they want to end those austerity measures. And they're leaning on their voter mandate as the power they need to keep an austerity-supporting government in place.
European finance ministers are meeting in Brussels today, and chances are Greece has moved to the top of the discussion agenda. European creditors have already made statements with money for Greece, when 1 billion euros were withheld from a loan. That angered Greeks since the funds were contingent no actions the country had already taken.
Second, over in Germany a state vote in an influential part of the country may be signaling trouble for Chancellor Angela Merkel. Her party was defeated in elections in the country's most populous state. That loss may signal internal issues over Merkel's moves on a number of issues. Social Democrats won the parliamentary election in North Rhine-Westphalia - Germany's most populous state.
The Social Democrats can team with the Green Party to create a coalition government to run the state. But the bigger picture concern is what it means for Merkel's party, the current policies and even the elections in September 2013.
Add those two issues together, along with the French change in power, and European markets are hurting. Concerns over the economy saw European markets fall 1.5%. And there are concerns about the health of the euro if Greece abandons the currency, or if other issues keep festering. The euro slipped and the dollar gained strength. Bond holders also sold their Spanish and Italian holdings pushing interest rates higher for the two counties.