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.
TEXT SIZE - +
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

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid