Jeremy Hobson: In a matter of days, two countries at the center of the European debt crisis will hold elections: France -- which is one of the key decision-makers in Europe -- is on the verge of election a socialist as president; And Greece -- which has brought the most drama to Europe -- could also be about to shake up its leadership. But it's Spain that's causing some heartburn today.
And that's where we'll start now with Marketplace's Stephen Beard, who is with us live from London. Good morning, Stephen.
Stephen Beard: Hello Jeremy.
Hobson: Well what's going on in Spain? Give us the bad news.
Beard: Well, Spain is back in recession, and this is going to make it much for difficult for Spanish banks to pay their way. They're laden with debt, and if the banks there start blowing up, the Spanish government is going to need a bailout -- a mighty big one too. That's going to be very, very expensive for Europe.
Hobson: That's the story that's getting some headlines today -- but of course, there are some big things happening this week, as we mentioned, in Greece and France.
Beard: That's right, and these elections are going to bring to a head a battle at the heart of the eurozone over the best way to tackle this crisis; whether to carry on with the German-inspired policy of austerity -- of cutting and cutting public spending. Or whether to layoff the cuts and try to stimulate some growth.
Now, the frontrunner in the French election, as we've heard, is anti-austerity and pro-growth. If, as seems likely, he wins the election over the weekend, we could see a big shift in EU alliances, with France moving into the pro-growth camp.
Here's Marcell Alexandrovich of Jeffries International Bank.
Marcell Alexandrovich: Potentially you have a situation where France, Italy and Spain that align themselves, and perhaps make less fiscal austerity in Europe, and obviously, have a different model of growth for the region.
He thinks Germany could be somewhat isolated in Europe -- never a happy state of affairs. That could be very messy, since of course, Germany is by far the biggest and most powerful economy and indeed, the one that's been picking up most of the tab of the bailouts.
Hobson: Marketplace's Stephen Beard in London, thanks Stephen.
Beard: OK Jeremy.