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

    Multimedia US Observes Memorial Day With Wreath-laying, National Concert

    Obama lays a wreath at the Tomb of the Unknown Soldier in Arlington Cemetery

    The Strife of the Party: Will Trump Permanently Alter Republicans?

    While billionaire mogul's no-holds-barred style, high-energy delivery are what rocketed him to nomination, they also have created rift between party elites and his supporters

    China's Education Reforms Spark Protest

    Beijing is putting a quota system in place to increase the number of students from poor regions attending universities

    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