France's new president, François Hollande, has a strong political mandate, but very little room for manoeuvre.
In the space of a year the French Socialist Party has achieved a rare political hat-trick, winning the presidency and majorities in both chambers of the French parliament. With the left also dominant at local level, Mr Hollande controls all the main levers of political power.
It is a huge irony therefore that compromise is set to be the watchword of Mr Hollande's presidency, as he seeks to steer an almost impossible course between his domestic priorities and France's external commitments as a member of the eurozone.
The first two big compromises of the Hollande presidency were at the heart of the deal struck at the EU summit at the end of June. The first relates to the balance of "austerity versus growth". Even before his election in May, Mr Hollande had signaled his acceptance of austerity policies promoted by the German chancellor, Angela Merkel.
In return, Germany agreed to various measures demanded by Mr Hollande to provide a growth stimulus at the European level. Many of his proposals were already under active consideration. But in the run-up to the elections he was able to differentiate himself from his opponent, Nicolas Sarkozy, by promising that without a growth agreement France would not ratify the eurozone's 'fiscal compact' drawn up by the 'Merkozy' duo. France will now do so later this year.
The harder part of this bargain will be delivering on France's commitment to reduce its budget deficit to 4.5% of GDP in 2012 and 3% in 2013 (from 5.2% in 2011), which is necessary to stabilise public debt around 90% of GDP. These targets cannot be met without remedial action.
The first steps were taken in early July when the government outlined new taxes designed to raise an additional €7bn-€8bn this year. These include a number of the changes hitting big business and the wealthy. Yet despite the sloganeering about making the rich pay, the less well-off will also make a contribution.
Further tax increases are expected in 2013, including the notorious 75% rate of personal income tax for the super rich, but the government will also have to spread the burden beyond the rich and the corporate sector, perhaps increasing VAT or social security charges.
The new government wants to soften up the electorate before revealing its plans after the summer. With savings of €30bn-40bn needed to hit the 2013 target, cuts to public spending are also inevitable. Those who voted for Mr Hollande on the basis of his "anti-austerity" policies are in for a shock.
Mr Hollande needs Germany's help.
If the poor state of France's public finances limits Mr Hollande's room for manoeuvre at home, it also reduces France's ability to influence the management of the wider euro zone crisis. French solidarity with its struggling neighbours has been reduced to calls for Germany and the European Central Bank to do more to ease the cost of borrowing.
So a second conundrum facing Mr Hollande is the price he is willing to pay to secure Germany's engagement. Ms Merkel's position is clear: Germany cannot accept more risk-sharing until others have agreed to more centralised controls. French socialists have an opposing view: that greater integration is politically impossible until the EU has demonstrated its ability to solve the crisis.
Mr Hollande's solution to the deadlock is to advance on two fronts simultaneously. Ahead of the EU summit, France called for the euro zone bail-out funds to be able to lend directly to banks. In return, France backed the creation of a single banking supervisor for the bloc. This was an important concession that opened the way for Ms Merkel to agree the changes to the bail-out funds, but only once a supervisor is in place.
If the new body is given real powers (a big if), it could eventually make winding up zombie banks and restructuring sovereign debts much easier. However, progress towards a fully-fledged "banking union", including common deposit insurance and resolution funds, will have to go hand in hand with steps to deepen fiscal union. By collectively underwriting banks, member states would also be underwriting the sovereign debt held by those banks.
Thus a more difficult compromise lies ahead. In the coming months the French president is expected to push for the introduction of commonly backed "euro bills" to ease short-term borrowing costs for the weakest euro zone states. But while urging others to take the next step down the road of "gradual federalism", he has yet to reveal whether he is willing to cede more sovereignty over France's public finances.
Domestically such a move would be very unpopular and would mean confronting the eurosceptics in his own party (and beyond) who see the EU as a threat to the French social model, not its saviour. A "grand bargain" between France and Germany is attainable, but it will require skill and a good deal of courage to pull this off.