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.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora