Germany is not considering changing its approach to Europe's debt crisis, despite growing opposition to Berlin's austerity policies. Chancellor Angela Merkel dismissed the idea of a major policy shift after Socialist Francois Hollande won in France and Greek voters punished ruling parties for cutting spending. Merkel's allies indicated that they expected Hollande to make concessions and roll back promises seen as risky for the eurozone. Volker Kauder, the parliamentary leader of Merkel's conservatives, stated that the German government will continue to prioritize saving money. After a disappointing state election for her Christian Democrats, Merkel is aware that in order to secure a third term, she must listen to German voters who are opposed to giving more financial aid to other countries. Kauder, a close ally of Merkel, expressed concerns that Germans could end up bearing the costs of a Socialist victory in France through increased guarantees and financial support, which he finds unacceptable. Germany is not willing to provide funding for the promises made by the French government in the upcoming elections. French President Hollande has made pledges that could be expensive, such as balancing the budget in five years, hiring new teachers, implementing a 75% tax on million-euro incomes, and increasing the minimum wage. These proposals, including joint euro zone bonds and a more active role for the European Central Bank, go against Germany's beliefs. Andreas Schockenhoff, a prominent CDU lawmaker, predicts that Hollande will soon commit to stability policies. Repeatedly questioned at a press conference about whether the French and Greek votes could impact the policy debate in Europe, Merkel's spokesperson Steffen Seibert emphasized that the way forward was through growth achieved by structural reform, such as changes to tax and labor rules to enhance trade, rather than relying on debt-funded stimulus plans. Merkel herself stated that while there was room to discuss tactics, the overall strategy agreed upon by EU leaders through a compact on fiscal consolidation was non-negotiable. She acknowledged that France, under its new president, would bring its own perspective to the ongoing debate, but stressed that both solid finances and growth were essential for progress. Following Hollande's victory, Merkel reached out to him with a phone call, marking their first conversation, during which they spoke with the assistance of interpreters for nearly fifteen minutes. Sources informed Reuters that Hollande and Merkel had a cordial conversation where Hollande expressed his desire for strong ties. Hollande is expected to visit Berlin on May 16, the day after he assumes office, for his first foreign trip. Merkel stated that Hollande would be warmly received. Germany has indicated its willingness to negotiate a "growth pact" with the new French leader, which could potentially help Hollande achieve his goal of a more balanced approach to the crisis, even if the details are unclear. However, it is unlikely that bold new initiatives that could significantly improve struggling economies like Greece and Spain will be implemented. German officials are focused on structural reforms rather than simply boosting growth, as CDU budget expert Norbert Barthle explained to Reuters. They are considering options such as utilizing EU structural funds more flexibly, increasing the capital of the European Investment Bank (EIB), and issuing "project bonds" to finance infrastructure investments. Importantly, these measures would not require a large amount of new funds from Berlin, which is why they are seen as feasible. However, Germany is strongly against the idea of implementing new government stimulus programs, granting more time for euro members to reduce deficits, or giving the ECB additional powers to boost growth. A high-level German source emphasized that there will be no relaxation of deficit targets and pointed to Hollande's victory speech in Tulle as evidence of his willingness to collaborate with Germany. Hollande's chief economic adviser, Michel Sapin, also stated that it is not anticipated for the new government to simply distribute funds upon taking power. Officials in Berlin and Brussels are taking a firm stance on Greece, emphasizing that there is no flexibility for the country to go back on or alter the terms of its multi-billion euro rescues by the European bloc and the IMF. The recent election results in Greece, which saw a rise in support for extreme parties, have raised concerns about Athens' commitment to its obligations and led to speculation about the possibility of Greece being forced out of the euro zone. A senior euro zone source warned that Greece must adhere to the agreed program in order to receive financial support from member states, or face default. The consequences of default are uncertain, but it would likely result in further hardship for Greek citizens. At the heart of the European project, which was created by France and Germany to prevent further wars, Hollande may find support from Italy, the euro zone's third largest economy. Despite facing economic challenges and pressure from creditors, Prime Minister Mario Monti's government in Italy has endorsed Hollande's growth-focused agenda. Hollande's approach to relations with Germany, France's key ally, will become clearer when he appoints his government later this month. Jean-Marc Ayrault, a German-speaking candidate who has shown willingness to work with Berlin, is a front-runner for prime minister over Martine Aubry, a more traditional Socialist. Choosing Ayrault would indicate Hollande's readiness for compromise. Louis Gargour, chief investment officer of hedge fund LNG Capital, expressed keen interest in observing whether Hollande will begin his presidency by confronting Merkel. He described it as a clash between Keynesian economics and a focus on growth versus a prolonged period of austerity that voters are increasingly weary of.