Even before he is elected as France’s next President, François Hollande is already making waves in a Europe that is weaker, much weaker, than it thinks it is.

A coalition of the unwilling is being created just as I write: those who do not want to subscribe to austerity, or in other words to the fiscal compact, and to underpinning hopes for a recovery by getting the financials right.

The first shoreline that this Hollande tsunami will hit is not France itself, but Ireland, far away. For on 31 May, Ireland is due to vote in a referendum on the fiscal compact. With France likely to elect a president who has already said he wants to reopen the compact, why should the Irish vote for more pain for themselves? It also seems that the German SPD may delay the ratification of the compact until after the second round of the French elections, and even then it might choose to wait some more. In fact, the numbers of those about to vote ‘NO’ is on the increase, the European press reported last week. On Wednesday, the Irish trade union movement said it could not support the treaty, which would tighten budgetary rules and introduce penalties for states that break the rules.

Unlike previous EU referendums, Ireland cannot block the treaty, as just 12 states are required to ratify it so as to enable the pact to enter into force. But only countries that pass the fiscal treaty will be eligible for funds from the European Stability Mechanism – Europe’s new bailout fund.

Next domino: Spain, where the newly-elected government has admitted it will not reach the pre-established deficit targets but also where over 20 per cent of the population is out of work, and where figures are far worse as regards youth unemployment. This is a clear sign of defiance of the fiscal pact and of its sponsor, Germany, and it will surely not be forgotten the next time Spain requests more funding to help it cope with the situation.

But the third domino that fell is a far bigger fish. The Netherlands is one of Germany’s hard-line allies, one of the few AAA rated countries still left intact (not even France has such an overall credit rating). And yet its government has collapsed because while all parties agree the deficit targets must be met, they disagree on which actual cuts should be made.

I will come back to Holland in a short while.

The country where all this debate will be played out is, understandably, France. Nicolas Sarkozy, the first French president ever to lose out even in the first round of the election, is now basing his residual strength on cosying up to Marine Le Pen and her xenophobic views, and to claim that Hollande’s policies would lead to rapid and successive downgrades and put France firmly on the slope that Greece is now on.

That may be electoral hype but Hollande himself has moved to grab the Centre: his close friend Michel Sapin told the international media that Hollande is not seeking to pick apart the fiscal pact, but rather that he wants to complete it with tools to promote economic growth.

So far, Germany is watching quietly, aware no doubt that any reaction could pull or push the election this way or that. But after next Sunday, the resident of the Elysee should expect a call from Chancellor Merkel. So far, the Germans have expressed cautious optimism they will find a basis for an agreement.

I doubt that they will. This will certainly not become a cosy Berlin-Paris huddle for it will involve all the eurozone nations and, by extension, the whole of the EU.

Up to a few weeks ago, it seemed that the German prescription had been accepted as the only remedy possible. The markets looked as though they had accepted that matters had improved. All the delinquent countries seemed to have suitably repented.

The European Central Bank funding looked like it had saved the euro. Then everything unravelled once again: the spreads widened, Italy and Spain were again under pressure, Portugal asked for a second bailout, France seemed to be backing off from its support of Merkel, and the Dutch government collapsed.

Greece, meanwhile, has been almost forgotten: but last week the Bank of Greece forecast its economy would shrink by about five per cent this year, the fifth year of contraction. Last year, the economy contracted by 6.9 per cent, a cumulative shrinkage of more than 13 per cent since 2008. Unemployment is forecast to rise to 19 per cent this year from last year’s 17.7 per cent.

Clearly, austerity is hurting. And just as clear is that austerity alone will never provide employment to the millions who are out of a job. Also very clear is that Germany, which courageously reformed its basics, had done so in times of an economic boom, and not of austerity. Moreover, its position as the biggest country in the eurozone and its exports to fellow member states, as well as the additional fact the euro is so strong, helped its industry produce more and sell more. Clearly too, the euro is overvalued.

It will not be easy to now persuade Germany to unbend a little so as to help the weaker states. To do so would open the Chancellor to the charge that she allowed German industry and the economy in general to weaken so as to benefit the miscreants. The Germans know one thing and they know it well: with their solution they have found growth and strength and that the others who want to grow should just copy what they did.

It is also easy to see why Sarkozy has failed and will fail on Sunday: he promised growth but did not deliver it; he waffled between opposing policies; he typically grandstanded all the time telling the French they were great when he should have got them to reform their system.

This does not mean Hollande will do any better. Even before he gets elected, his policies seem contradictory; he promises to spend more when France does not have the money to do so; his policies are expansionary when that is the last thing France needs. And he still promises to balance the books.

But it’s the collapse of the Dutch government that is the surest sign of deep cracks developing all through Europe’s heart. There is broad agreement in Holland about the need to keep to the targets of the fiscal compact but Geert Wilders – the firebrand with the anti-Muslim, eurosceptic rhetoric – has proved once again to be a destabilising force that could upset previously laid plans.

The agreement reached before Wilders scuppered it was to have raised healthcare charges, cut special needs education, brought forward a planned increase in the retirement age from 65 to 66, slashed development aid, and raised VAT by two per cent. To this, Wilders counter-proposed his own cuts: slash left-wing subsidies such as development aid and cultural subsidies. And above everything else, do not get ordered around by Brussels.

And we puny people here in puny Malta? Over the past days, I have been struck in noting that while we have our own, very insular way of analysing what is going on in these turmoil-filled days as the government hangs on by the skin of its teeth, refusing to bow to the laws of gravity, while we personalise anything and everything and read personality clashes and/or contrasting ambitions behind anything that happens, the resulting situation is nevertheless comparable to what is happening in far bigger countries.

Understand one thing: in the current euro crisis, no head of government has survived an election. And in fact, two did not even face elections and were removed. Will Lawrence Gonzi be the only one to buck the trend?

Secondly, in a situation of instability just like in Holland and in Malta, the unstable element will undoubtedly wobble. Geert Wilders in Holland can thus be compared to Franco Debono or JPO, even though these two seem to have their own specific requests and complaints rather than widening their contrast to wider issues (only JPO did so with his sortie on Turkey). None has expressed eurosceptic views – which one could have expected from people who are sceptical about how Lawrence Gonzi is governing.

Our own instability, forever reported to be at boiling point but never actually boiling over, may wait. The real issue now is Hollande and Holland. So until our government collapses or calls it a day (the latest date doing the rounds for the election is 29 September with all that Independence brouhaha leading up to it), what will play out on the wide European stage has a very direct impact on our own future.

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