By contrast, we believe that the election of Socialist candidate Francois Hollande as President of France is likely to have more profound and long-lasting effects on financial markets and the global economy. If Hollande's party receives a majority in June's parliamentary elections, as polls currently suggest, then his election is likely to mark the end of austerity policies in Europe. Specifically, Hollande is likely to push for a far more activist monetary policy by the ECB ("stealth" quantitative easing).

Contrary to the hopes of his electorate, we do not think that Hollande's policies will improve France's economic prospects and his retreat from structural economic reform may keep French equity markets depressed (as well as any other European markets that follow France's lead). However, a more aggressive ECB could greatly improve growth prospects for Germany and developed economies outside of the Euro bloc (especially the US and the UK). In addition to its economic impact, ECB quantitative easing should ultimately prove supportive of the global equity markets and "weak" Europe's bond markets.

David Fuller's view Advocates of Austrian school economics will deplore this approach but I think it is the only way Europe can hold the single currency together for another decade with most of its present member states.

Michael Jones provides an excellent, logical analysis and I commend this issue of his letter to you.

What projections can we make for Europe's markets?

I maintain that the ECB will need to continue with its version of QE (LTRO, to date) and expand it in order to keep the political construct known as the euro in business. Currency markets are anticipating this so the EUR/USD is likely to remain under pressure more often than not.

ECB President Mario Draghi will be waiting to hear from Angela Merkel and Francois Hollande, who are meeting this evening, but he will have to act quickly because Spanish and Italian bond yields are rising once again and the Euro STOXX Banks Index has fallen to its lowest level since the late 1980s.

Markets are already discounting Greece's exit from the euro and bidding up the price of De La Rue (4.6% yield) which would presumably print the drachmas?

I agree with Michael Jones and many other people that Germany's economy will be the biggest beneficiary of a weaker euro. The DAX Index is currently in a downtrend but when it next reverses upwards, Germany's exporters should be strong performers.