Financial markets will likely stumble this week after elections in Greece and France cast a pall of uncertainty over Europe's efforts to solve its debt crisis.
Greek voters on Sunday voted mostly for two parties that want to change the nation's international bailout terms or even overturn the rescue deal, according to early projections of the election results. Greece won't have a government until parties with divergent worldviews can form a governing coalition.
Greek voters are reacting against spending cuts imposed on the recession-weary nation by the international lenders whose bailouts are keeping it afloat.
French President Nicolas Sarkozy lost in a runoff election to Socialist candidate Francois Hollande. Hollande has criticized France's austerity program and wants to encourage growth by boosting government spending.
Sunday's votes raise serious doubts about whether voters will swallow the current plan of international bailouts coupled with severe cost-cutting, economists said.
Many experts believe the austerity program is necessary to keep bond investors from panicking about the possibility that more European nations will default or require bailouts.
But a growing number say the cuts have been too much, too fast. They say the region's economy can't return to growth unless governments stop tightening the fiscal noose and start spending again to create demand.
Much depends on the reaction of investors in debt issued by European nations, said Dimitri Papadimitriou, president of the Levy Economics Institute at Bard College. If they fear that the crisis response is losing momentum, they will likely demand higher interest rates - not just from Greece, but from other nations seen as carrying too much debt.
The result would be rising borrowing costs for Greece as well as countries that haven't received bailouts, like Italy and Spain. Rising borrowing costs sent global stock markets diving last year. Uncertainty about the path forward in Europe may mean a return to extreme market volatility after several months of relative calm.