How will austerity-averse Europe affect Asia?
In elections in France and Greece, Europeans have voted against biting austerity measures.
French voters elected a Socialist president in Francois Hollande, and in Greek parliamentary elections, the two main parties, New Democracy and Pasok, won less than a third of the vote.
Asian markets are reacting to fears that promised cuts in government spending will now be back up for debate.
How will this affect the economic picture in Asia and the willingness of countries in this growing region to help bail out Europe?
Many Asian countries count Europeans among their major customers, but as much of Europe sees low or negative growth, one of the knock-on effects is that Europeans spend less.
However, Kelvin Tay from UBS wealth management says this is less of a concern as Asian economies have become less dependent on Europe.
"Asian exports as a percentage of gross domestic product (GDP) to the eurozone is no longer as significant as it was before," says Kelvin Tay, chief investment officer for South Asia Pacific at UBS Wealth Management.
"The most exposed markets are Hong Kong (14%) and Singapore (12%).
However, Mr Tay says the region is still exposed to turbulence in Europe because of the interconnectedness of the global economy.
"We need to distinguish between a structural and a liquidity crisis. Structural issues are usually specific to a particular region. The ongoing eurozone debt crisis is a great example."
"Liquidity issues are not region-specific and due to the globalised nature of capital flows, a structural crisis can in turn trigger a liquidity crisis in another part of the world," Mr Tay says.
Jason Hughes from IG Markets sees a positive upside to the change in leadership in France and Greece, with voters choosing candidates who think their countries should be focusing more on spurring growth and less on cutting government spending.
"From an Asian perspective, the eurozone is a key trading partner and the resurfacing potentially of key issues such as the Greek bailout is not an encouraging sign," says Jason Hughes from IG Markets.
"However, the suggestion that the new regime in France and the potential yet-to-be-formed coalition in Greece will have a more pro-growth stance could be encouraging for Asian exporting countries."
"The focus up until now was for austerity and cuts. This shift could bode well for Asia's large exporting nations, such as China. Whether it is an achievable shift is still yet to be determined," he adds.
The negative reaction in Asian markets on Monday was due to a few different factors, but underpinning the drop were renewed worries about the global economy.
"At the end of last week, weak economic data out of America suggested the economic recovery in the world's largest economy is still on shaky ground and led to financial markets ending the week on a soft note," says Mr Hughes.
"The latest developments and changes in the European political landscape over the weekend were always going to result in further weakening across many asset classes as uncertainty returned with a vengeance."
Mr Hughes says how long this uncertainty is going to last is not clear.
"If the Greek government can be formed in the next week or so then this could settle down relatively quickly, however, if there are many failed attempts to form a coalition then the markets could well take a very negative view to this."
David Carbon from DBS says either way, money will be flowing out of Asia in the short term.
"Whether or not austerity is the right path to take from an economic perspective, markets will take the uncertainty poorly," he says.
"Investors will take risk off the table. For Asia this means capital will flow out of the region, at least for the time being.
Mr Carbon points to figures from last year that support this theory.
Foreign reserves fell by nearly $200bn (£123.7bn) between August and December of last year, when the European union crisis was reaching its then-peak, he says.
"About half that was recouped in the first three months of 2012 but we will surely see outflow over the next month or two depending on how things are or are not resolved going forward."
Mr Tay says investors are avoiding risk at the moment and putting their money into traditional safe haven investments such as US government bonds and gold.
"It goes without saying that all risk assets such as Asian equities, bonds and currencies are likely to be negatively impacted," he says.
"However, unless the eurozone situation really gets out of hand and liquidity tightens significantly, Asian capital markets are likely to be resilient."
The big question causing anxiety amongst Asian investors is whether Europe will do a U-turn on austerity, according to Mr Carbon.
He says it creates uncertainty about how willing countries will be to contribute to the International Monetary Fund to help contain the eurozone debt crisis.
Mr Tay says in this regard, the situation in Greece is the biggest cause for concern.
"The key to continued funding from the International Monetary Fund/European Union is the reduction of Greece's public deficit from 9.3% of GDP to 1.6% by 2015."
"If you have no government in place or a new government completely opposed to austerity, then the imposed deficit targets are not going to be met.
"There is therefore a very high risk of the IMF suspending the next payment, with the EU following suit."
Finally, Europe's ability to sort out its internal politics will determine how Asia reacts to the situation, according to Mr Hughes.
"The move to the left seen from the French elections and the move towards extremist parties in Greece will be perceived as worrying by investors in Asia," says Mr Hughes.
"The key is how these new governments work together within the EU and the eurozone to continue to progress the region out of the debt crisis it has now been submerged in for many years."