European stock markets have fallen after President Nicolas Sarkozy narrowly lost the first round of France's presidential election to socialist rival Francois Hollande.
France's Cac 40 and Germany's Dax indexes were down about 1.5%, with the UK's FTSE 100 1% lower.
Mr Hollande has said he intends to focus on boosting growth through spending rather than on austerity.
The collapse of budget talks in the Netherlands added to market nerves.
Mr Hollande won 28.6% of votes in Sunday's election, with Mr Sarkozy taking 27.1%. It is the first time a sitting president has lost in the first round of a presidential election.
The two will go head-to-head in a second round of voting on 6 May.
While Mr Sarkozy, along with the rest of Europe, has stressed the need for austerity to bring down high levels of debt, Mr Hollande has said stimulating growth is the more effective option.
This has raised fears among investors that France would struggle to control its debts should the socialist candidate replace Mr Sarkozy.
Markets were also unnerved by the failure of Dutch government to agree on austerity measures, raising the prospects of fresh elections in the country.
"The Netherlands could be a problem because, up until now, it was a stable partner in the eurozone; this shows the problems and increasing tensions within the area," said Christian Stocker at UniCredit Global Research.
"It's definitely a problem for the market."
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