News

    France's Presidential Frontrunner Gives Markets the Jitters

    Socialist candidate Francois Hollande, center, arrives at Brive airport in Brive, Central France, after the first round of the presidential election, April 22, 2012.
    Socialist candidate Francois Hollande, center, arrives at Brive airport in Brive, Central France, after the first round of the presidential election, April 22, 2012.
    Lisa Bryant

    The eurozone's sovereign debt crisis has helped topple half a dozen European leaders. It looks like French President Nicolas Sarkozy may be next. Polls show Sarkozy's Socialist rival, Francois Hollande, winning France's May 6 runoff election.  But the prospect of an Hollande presidency is making markets - and analysts - nervous.

    It's been nearly 20 years since France had a Socialist president. That may change in just over a week. French polls all predict Socialist contender Francois Hollande will beat conservative President Nicolas Sarkozy in the second round of presidential elections on May 6.

    In press conferences and interviews - like one on French radio Friday - Hollande outlines an economic strategy that includes more taxes for the rich and more spending to stimulate growth.

    But Hollande says his first action would target the wider eurozone crisis that is now in its third year.  Hollande says he will renegotiate a European Union fiscal treaty agreed to last year in order to promote economic growth.

    The Socialist candidate is getting applause from his supporters - but not from markets, which briefly dipped after he won the first round of French elections last Sunday.  Analysts like economics professor Tomasz Michalski, of the HEC business school in Paris, also see little reason to cheer.

    "First of all, Hollande is going to increase very drastically taxes in France. In the short run the increase in taxes is going to lower the budget deficit," he said. "But in the long run it's not a good growth strategy…this is going to keep talent away. And France desperately needs new businesses, desperately needs entrepreneurs to keep the economy going."

    Other experts agree. Britain's leading The Economist magazine is even more critical, calling Hollande's economic prescriptions "dangerous."

    Analyst Philip Whyte, of the London-based Center for European Reform, says he understands why markets are jittery about an Hollande presidency.

    "But of course, once he's in office, he will very quickly be confronted by some of the constraints of office and some of those constraints might be imposed by the bond markets," he said."

    Hollande's growth prescription for Europe even got some support this week by European Central Bank Chief Mario Draghi, who called on governments to invest in jobs and growth along with spending cuts.

    Jobs and economic growth are top concerns of French voters like 54-year-old Fatna Chouaikh.  Chouaikh believes Hollande can turn things around.   She says Hollande is competent, hard-working and has what it takes to bring France out of its economic doldrums.

    Under current President Sarkozy, the economy shrank and unemployment soared to nearly 10 percent.

    Most analysts agree that Sarkozy is not to blame for a global crisis that has sent many other economies tumbling as well. Whyte, of the Center for European Reform, credits Sarkozy for pushing through a few key reforms - like raising the retirement age - and for his initial leadership in the eurozone crisis.

    But Whyte faults the French president for letting German Chancellor Angela Merkel dictate eurozone policies today. And overall, he gives Sarkozy's performance a mediocre review.

    "The problem with Sarkozy is that he really doesn't have an economic vision," Whyte said. "He's a man of action. But he has no real coherence to much of what he does. If you look at his performance over five years as president, there's not been a terribly clear economic path he's forged."

    Professor Michalski offers similar criticism.

    "The measures that Sarkozy is proposing in this campaign do not form a coherent long-term program," he said. "Rather, they're small measures addressed to particular issues. So I'm very skeptical."

    Ultimately, smaller parties may shape the economic policies of either an Hollande or a Sarkozy presidency.  Hollande is counting on far-left and centrist voters to win the May 6 runoff.  Sarkozy is courting those who voted for the far-right in the first round - and who are skeptical of the European Union and of taking economic orders from Brussels.

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Phillipe
    May 03, 2012 2:34 PM
    Looks more like France will make the same error electing Hollande as USA made electing Obama.
    As the article cites Philip Whyte: "But of course, once he's in office, he will very quickly be confronted by some of the constraints of office and some of those constraints might be imposed by the bond markets," he said." The mythology that there is this evil 1% will continue....
    Margaret Thatcher still rings true.

    by: Jacques
    April 30, 2012 5:10 PM
    I just think that unless Mr Romney can somehow restore common sense confidence back to the business community Mr Hollande may well win as France can not risk privatizing any big rail, utility assets. After all how can the President convince the electorate to support change when he has spent his Presidency patching holes in a helium balloon? Bonne chance Mr le Président.

    by: Jean-Marc
    April 29, 2012 12:03 AM
    There is no surprise that The Economist, the voice of the 1% richest people, fears the perspective of the victory of Mr. Hollande in the next French presidential election. But, considering the disastrous performance of conservative austerity policies enforced in Ireland, Portugal, Spain, Italy, Greece and the UK, we can doubt The Economist's wisdom.

    by: Jean-Marc
    April 28, 2012 11:53 PM
    Foreigners may not be aware that beyond economy, this election will be won over value issues. Mr. Sarkozy blames the unemployed, the poors, the immigrants and the labour unions of being responsible of the crisis. He now embraces far right views about immigration. Mr. Hollande blames the banksters and the 1% most wealthy and promises to restore more justice, equality and solidarity. This contrast heats up the campaign to unprecedented level of passion on both sides.

    by: Jean-Marc
    April 28, 2012 11:45 PM
    During his 5-years term, Mr. Sarkozy outrageously supported the rich with 50 billion euros of tax cuts and approximately 50 billions more of tax loopholes that benefited the 1% richest only. He now promises to raise the VAT and to further reduce social benefits. Meanwhile Mr. Hollande promises first to reduces these fiscal gifts and restore more equality in the taxation system. This contrast might explain the more than advantageous polls in his favor in the first place.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora