News / Europe

France's Hollande Has Tight Window to Step up Reform Pace

French President Francois Hollande presents his New Year wishes to the French Army after visiting special forces troops at Creil military airbase in Creil, near Paris, Jan. 8, 2014.
French President Francois Hollande presents his New Year wishes to the French Army after visiting special forces troops at Creil military airbase in Creil, near Paris, Jan. 8, 2014.
Reuters
The coming weeks will tell whether Francois Hollande can pick up the pieces of his accident-prone presidency and start to pull the euro zone's second-largest economy out of decline. It may be his last chance to do so.
    
The new year could hardly have started worse for the French leader, who failed to keep a promise to the nation to halt the rise in unemployment by the end of 2013 and is now dealing with media allegations of a secret love affair.
    
Photos in a celebrity magazine published last week purporting to show a nocturnal visit by Hollande to a mistress risk stealing the show on Tuesday when he faces media for up to two hours in the traditional start-of-year news conference.

The French magazine 'Closer' with photos of President Francois Hollande and actress Julie Gayet on its front page, is presented in a newspaper stall on the Champs Elysee Avenue in Paris, Jan. 10, 2013.
The French magazine 'Closer' with photos of President Francois Hollande and actress Julie Gayet on its front page, is presented in a newspaper stall on the Champs Elysee Avenue in Paris, Jan. 10, 2013.

Hollande's office has complained of breach of privacy but issued no denial. Yet with polls showing most French are blase about his private life, the real question is whether he will use the media event to show he is ready to tackle the double burden on the French economy: rising taxes and public spending.
    
"As is often the case, there are good intentions. But we will judge the deeds," said analyst Bruno Cavalier at Paris-based Oddo Securities.
    
The Socialist Hollande, who in his 2012 election campaign labeled the world of finance his enemy, ignited speculation of a U-turn with a New Year's address to the nation offering business leaders a "responsibility pact" trading lower taxes and less red tape for company commitments to hire more staff.
    
Striking a new tone which has already raised hackles with unions, he also declared it was time to stamp out the abuses of France's generous welfare state, and cut public spending so as to create room for tax reductions after a series of rises.
    
Some see echoes of the about-turn made 30 years ago by Hollande's mentor Francois Mitterrand, who in 1983 halted a policy of nationalization and expansion of worker benefits just two years into his mandate as public finances crumbled.
    
About time too, say those who argue that public spending at around 57 percent of national output - some 12 points more than that in Germany - is a burden the economy cannot afford. French debt at 93.4 percent of GDP and rising is now "in the danger zone", the national audit office warned last week.

'Francois Blair' or French Gerhard Schroeder?
    
The prospect of a policy shift has been applauded by France's main employers federation Medef, due to start talks in coming week with Hollande's government on tax cuts it hopes will restore corporate margins among the weakest in Europe.
    
Left-wing newspaper L'Humanite dubbed him "Francois Blair" after the centrist British prime minister who dreamed up "New Labour" pragmatism, while others asked whether Hollande would follow the reforms implemented in Germany in the last decade.
    
"What indeed if, after 18 months of empty words and drift, Francois Hollande became the French Gerhard Schroeder?" Marc Touati of the ACDEFI economic consultancy asked, referring to the Social Democrat ex-chancellor who implemented painful labor market reform in the 2000s.
    
But he predicted "This is a sort of bluffing tactic intended to gain time, soften up ratings agencies and investors but which will not result in hard measures."
    
Such skepticism is understandable. Pension and labor reforms implemented last year, while significant first steps, have hardly broken the mould. Projected 2014 French growth of just one percent will struggle to create private sector jobs.
    
So far, this year's budget foresees public spending cuts of 15 billion euros or some 0.7 percent of GDP. Yet the government still has to explain how the bulk of these will be achieved before it goes on to examine further possible cuts.
    
Moreover the rapprochement with business risks alienating the moderate CFDT trade union which has so far been a vital ally to Hollande, backing pension and other reforms despite resistance from other, more hardline, labor organizations.
    
"I am issuing a warning: the trade unions have got to be players in all this," CFDT Secretary-General Laurent Berger said last week, insisting there could be no "blank cheque" for companies without benefits to labor as well.
    
Hollande always said his strategy was to reform in the first half of his five-year mandate and reap the benefits in the second half. But time is running out if he is to set down a marker for more action this year.
    
Local elections to decide who runs major French cities are to be held in March, followed by European Parliament elections in May where the far-right is seen doing well. Any policy shift must be well bedded-down before then.
    
"We believe the political agenda is at risk of completely freezing up in the run-up [to the elections]," Barclays economist Fabrice Montagne said.
    
"However, the president has a window of opportunity in January's round of New Year wishes to clarify the government's policies and intentions before the start of the campaign."
    
Hollande may conclude he has nothing to lose now from taking a few risks. A survey by pollster Ifop released in the Journal du Dimanche newspaper this weekend showed little impact on his poll ratings from the allegations of a secret affair.
    
With Hollande currently enjoying little more than 20 percent of support, Ifop deputy chief Frederic Dabi noted: "He is already so unpopular that it hasn't changed anything."

You May Like

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs