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.
Russia Accused of Abusing Interpol to Pursue Opponentsi
X
Henry Ridgwell
July 28, 2015 9:53 PM
A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video Special Olympics Athletes Meet International Friends

The Special Olympics are underway in Los Angeles, California, with athletes from 165 countries participating in an event that gives people with intellectual disabilities the chance to take part in an international competition. VOA's Mike O'Sullivan reports that for athletes and their families, it's also an opportunity to make new friends in an international setting.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Iran Nuclear Pact Wins Few New US Congressional Backers

Later this week, President Barack Obama returns from a trip to Africa to confront a U.S. Congress roiled by the nuclear accord with Iran, an agreement that has received the blessing of the U.N. Security Council. Days of intensive lobbying and testimony by top administration officials have won few new congressional supporters of the pact. VOA’s Michael Bowman reports.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video Critics of Japan Defense Policy Focus on Okinawa

In Okinawa, many locals have long complained that Tokyo places an unfair burden on the tiny island by locating most of Japan's U.S. military bases there. As Japan's government moves toward strengthening and expanding the country's defense policies, opponents of those plans are joining local protesters in Okinawa, voicing concern about where the country is headed. VOA’s Brian Padden reports from Okinawa.
Video

Video IS Uses Chemical Weapons in Syrian Attack

Islamic State militants have added a new weapon in their arsenal of fear: chemical weapons. VOA Kurdish service reporter Zana Omer was on the scene within hours of a recent attack in Hasakah, Syria, and has details of the subsequent investigation, in this report narrated by Miguel Amaya.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.

VOA Blogs