So, as expected, Francois Hollande has been elected the new President of the French Republic, and, as expected, he has called his victory a sign of the end of austerity. It’s worth remembering, at this juncture, that it’s not that simple.

As I’ve been arguing for some time in this space and in my previous blog home, Europe’s fundamental problem is structural, and it can only be resolved with changes to the structure of the EU (or by breaking up the currency union).

For a currency union to work, you either need a high degree of uniformity or some kind of fiscal union. Europe currently has neither. The ECB could guarantee the bonds of every member state, but this would create a moral hazard if there were no mechanism to force member states to run a reasonably tight fiscal ship across the business cycle. There is currently no such mechanism. So the ECB is using tight monetary policy as such a mechanism. Austerity is not really a serious attempt to solve Europe’s problems. It’s a loaded gun aimed at forcing unpopular reforms on southern Europe.

Nicholas Sarkozy was committed to preserving French sovereignty within the EU. His main “achievement” in office was the Libyan war, for which he was the leading advocate not only within Europe but globally, and which was undertaken substantially in order to prove the importance of French “leadership” in international affairs. The French vision of the EU has always been of a close alliance of states, naturally led by France, and Sarkozy’s vision consistently conformed to this model. In the current economic environment, what that meant was behaving as if there were uniformity in Europe, and pursuing austerity.

If Hollande wants a more pro-growth tack in Brussels, the question he’s going to get is: what is he offering? The only thing he can offer that is of any value, within the framework of preserving the EU, is greater support for the German vision of the EU as a federation of states rather than an alliance, which implies giving Brussels (and implicitly Berlin) more control over the fiscal policies of member states. As a Socialist, Hollande probably has more ideological room to go there than a Gaullist does, but not much more; French attachment to national sovereignty transcends party ideology.

The question isn’t whether Hollande will be robust in pursuing French national interests or not. The question is whether he’s going to identify those interests with preserving French sovereignty at the price of continuing austerity, or whether he’s going to prove more willing to trade some sovereignty for German support for either looser monetary policy or greater fiscal support for southern Europe. That’s been the question since the beginning of the crisis, and it continues to be the question.

Of course, the Germans have to ask themselves the same question. There, though, it’s clearer that the center of gravity favors greater European federalism. Merkel’s opposition is already on record as supporting the creation of euro-bonds (the first step toward some kind of fiscal union) and there is already speculation that Merkel would actually get on better with Hollande than she did with Sarkozy. I’m inclined to join that speculation. Certainly, her own party’s political future depends on making some kind of progress on a new direction for Europe. And if she can’t get structural concessions from Hollande that would justify her own shift away from austerity, I can’t imagine what French government she could get them out of.

And even if they come to agreement on these mutual concessions, they still have to sell them to their respective peoples. There, they’ve really got their work cut out for them.