Americans have watched as Europe has teetered on the brink of economic chaos, reminiscent of a Buddhist monk preparing to set himself on fire.

It appears that the match has been lit.

French socialist Francois Hollande has won a clear victory in the country’s presidential election.

Mr Hollande – who got an estimated 52% of votes in Sunday’s run-off – said the French had chosen “change”.

Admitting defeat, centre-right incumbent Nicolas Sarkozy wished “good luck” to Mr Hollande.

Analysts say the vote has wide implications for the whole eurozone. Mr Hollande has vowed to rework a deal on government debt in member countries.

Shortly after polls closed at 20:00 (18:00 GMT), French media published projections based on partial results giving Mr Hollande a lead of almost four points. Turnout was about 80%.

Jubilant Hollande supporters gathered on Place de la Bastille in Paris – a traditional rallying point of the Left – to celebrate.

People drank champagne and chanted: “Sarko, it’s over!”

Mr Hollande – the first socialist to win the French presidency since Francois Mitterrand in the 1980s – gave his victory speech in his stronghold of Tulle in central France.

He said was “proud to have been capable of giving people hope again”.

He said he would push ahead with his pledge to refocus EU fiscal efforts from austerity to “growth”.

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

Mr Hollande has called for a renegotiation of a hard-won European treaty on budget discipline championed by German Chancellor Angela Merkel and Mr Sarkozy.

Meanwhile, in Greece…

Greece’s former finance minister and Socialist party leader called for a broad coalition government of pro-European parties, ruling out a two-party government with his conservative rivals after his party received a drubbing in Sunday’s parliamentary elections.

Official projected results showed Evangelos Venizelos’ PASOK party plunging to third place with 13.6 percent and 42 seats in the 300-member parliament. The conservative New Democracy was projected in the lead with 19.18 percent and 109 seats, far below the 151 needed to form a government. The margin of error was 0.5 percentage point.

“A coalition government of the old two-party system would not have sufficient legitimacy or sufficient domestic and international credibility if it would gather a slim majority,” Venizelos said. “A government of national unity with the participation by all the parties that favor a European course, regardless of their positions toward the loan agreements, would have meaning.”

If borne out by final results, the outcome is devastating for PASOK, which won a landslide victory in 2009 with more than 43 percent of the vote.

Voters outraged by Greece’s protracted financial crisis and the austerity measures imposed in return for international bailouts punished both main parties, turning to smaller anti-bailout groups instead. The leftist Syriza, which was projected in second place with 16.3 percent and 50 seats, has been strongly opposed to Greece’s bailout agreements.

“For us in PASOK, today is particularly painful,” Venizelos said. “We knew the price would be heavy and we had undertaken for a long time to bear it.”

Things aren’t  so peachy-keen in Germany, either:

German Chancellor Angela Merkel’s centre-right coalition lost power in the state of Schleswig-Holstein, first estimates showed Sunday, after a vote that could presage national elections next year.

Merkel’s Christian Democrats (CDU) scored 30.6 percent, according to ARD public television, with her junior partners at the national level, the Free Democrats (FDP), winning 8.3 percent – not enough to retain power in the northern state.

However, the opposition – combining the centre-left Social Democrats and ecologist Greens – also failed to gain sufficient support to form a government, with 29.9 percent and 13.6 percent respectively.

This left as a strong possibility a so-called “grand coalition” between the CDU and SPD, which many believe could be the final result of the national elections due in September or October 2013.

The big winners on the night were the Pirates, an upstart party that has shaken up the staid world of German politics with a campaign based on more transparency in the political process and internet freedom.

For the third consecutive regional election, they breached the five-percent mark needed to enter the state parliament, winning 8.2 percent of the vote.

But for the FDP, although they lost more than six percent compared to the last election in 2009, it was a better-than-expected result, given that they are polling nationally at around three percent.

Turnout was low, with around 60 percent of the 2.2 million registered voters casting their ballot, compared to more than two-thirds in 2009.

The socialist Left party failed to clear the five-percent hurdle, scoring around 2.4 percent. A party representing the state’s small Danish minority also fell below the threshold, with 4.5 percent.

The parties will now engage in days of horse-trading before the final make-up of the state parliament is determined.

However, the election will have little impact on the make-up of the Bundesrat, the upper house of parliament where Germany’s 16 states are represented, and Merkel’s personal popularity remains high.

Back on April 24th, Robin Wells reported on the effect of what was happening in European Politics on the markets, for guardian.co.uk:

When markets contemplate that it’s likely that another austerity-skeptic, François Hollande, will win the presidency in France, then the pattern becomes impossible to ignore: the “core” eurozone countries are fragmenting. While it would be foolish to make predictions, what is probable is that Germany’s political isolation within the eurozone will deepen, leaving German taxpayers unwilling to continue backstopping the whole system.

Unthinkable as it seems, the logical conclusion is that the eurozone cannot continue to exist, at least in its present form. Markets, which hate unquantifiable uncertainty, are sensing this. We are likely to be in for an extended period of gut-wrenching turbulence.

What are the implications for the US, economically and politically? Direct links between the US and eurozone economies are fairly minor: we don’t export that much to them, they don’t import that much from us, and US banks have had an extended time to cut their exposure to eurozone risk. Yet the collateral damage could still prove significant.

When the stock markets fall, consumer and business confidence falls, leading to cutbacks in spending – bad news for an American economy that is still mired in recession. In addition, crisis in Europe makes for a stronger US dollar, as investors flee to safer abodes. Again, bad for the economy as a stronger dollars hurts US exports.

The reality of the eurozone’s troubles should lend support to President Barack Obama’s campaign against GOP presidential nominee presumptive Mitt Romney and congressional Republicans. It provides a demonstration that austerity is self-defeating, that fiscal stimulus is needed in a deeply depressed economy, that recovery from a financial crisis is a slow and halting process, and that by grasping the nettle immediately, the Obama administration has succeeded in stabilizing its financial sector – while the Europeans have made a hash of it.

Ms. Wells’ thoughts about our economic plight are way off…unless she calls the Obama Administration embracing of European Socialist-style Big Government, spending like there’s no tomorrow, and keeping unemployment at over 8% “stabilizing the financial sector”.

It is imperative that America not follow Europe’s example, this November 6th.