Euro zone stock markets plunged on Monday on signs that painfully crafted political plans to nurse euro zone member states back to fiscal health were being undone by a political backlash against the attendant austerity.

These included Sunday’s defeat for the incumbent in the first round of the French presidential election and Saturday’s collapse of the Dutch government.

Equity markets were battered further by a disappointing survey of the euro zone economy. This added to recent evidence that the fragile recovery, which had appeared to follow the incomplete political and economic resolution of the euro zone crisis at the end of last year may have been illusory.

The provisional monthly Purchasing Managers' Index (PMI) survey by Markit Economics suggested that euro zone output declined in April at its fastest pace in five months — prompting companies to cut their workforces with the greatest severity in two years.

Responding to the political news, Jim Reid, head of global fundamental credit strategy at Deutsche Bank in London, said: “All year we’ve been of the opinion that problems with austerity would be the reason this sovereign crisis would reignite as we approached the second half. The French and Dutch are now political headaches for Europe.”

Chris Williamson, chief economist at Markit, said, “The flash PMI signaled a faster rate of economic contraction in the euro zone during April, extending what appears to be a double-dip recession into a third consecutive quarter.”

Official euro zone data shows a fall in output in the final quarter of last year, and both official numbers and Markit PMI surveys suggest output may have declined again in the first quarter of this year.

In France the first round of the presidential election showed the Socialist candidate François Hollande in the lead with 28.6 percent of the votes — 1.5 percentage points above his nearest rival, Nicolas Sarkozy, the center-right current president. This suggests that Hollande is likely to win the second and final round of the election — a run-off with Sarkozy — on May 6. Sarkozy has suffered the fate of many other European incumbents: His popularity has been damaged by government parsimonies meted out because of parlous public finances.

Fears that Hollande will place little priority on reducing France’s fiscal deficit are overdone, according to some analysts. He has pledged to bring it down from 5.2 percent of gross domestic product (GDP) last year to zero by 2017.