France’s Hollande Aims to Build Parliamentary Majority

Newly-elected French president François Hollande aims to build a left-wing majority in parliamentary elections this and next Sunday. His Socialist Party could, for the first time in a decade, win an absolute majority in the lower house. It already controls the Senate.

Hollande defeated conservative Nicolas Sarkozy in last month’s presidential poll and has called for voters to give him a strong mandate to fund public-sector job creation and raise taxes to reduce France’s budget shortfall which is expected by the European Commission to be 4.2 percent of gross domestic product this year.

To woo left-wing and centrist voters, Hollande, in the weeks since he was elected, has announced a reduction in the pension age back to the age of sixty for some workers and repealed a rise in sales taxes. Sarkozy’s right-wing government had increased the pension age and value-added tax rate to reduce government spending and bring in more revenue.

To implement actual stimulus measures and cement his status as Europe’s champion against austerity, Hollande needs a cooperative parliament.

Opinion surveys conducted before the first round of voting on Sunday predicted that the Socialist Party, with its Green and far-left allies, would emerge with a majority.

Conservatives try to lure voters by warning of the detrimental effects of higher spending and higher taxes. Jean-François Copé, the leader of the Union pour un mouvement populaire, said the Socialists are preparing “the biggest ever tightening of the screws on the middle class.” Former premier François Fillon, who is seen as a possible successor to Nicolas Sarkozy, said that Hollande will “massively boost taxes” if he is given a majority.

Right-wing voters appear largely apathetic to the election however. Polls also suggest that up to 40 percent of French voters will not participate in the election at all. Dispirited by Sarkozy’s failure to win reelection and the rise of Marine Le Pen’s populist Front national on the far right, many traditional conservative voters are staying home.

Sarkozy’s Final Pitch: “We Don’t Want Socialism”

Facing an uphill battle to win Sunday’s presidential election, France’s Nicolas Sarkozy is trying desperately to cast his left-wing opponent as an old school socialist who will try to tax and spend his way out of the nation’s budget woes.

During an almost three hour televised debate on Wednesday night, the incumbent attacked his Socialist Party challenger François Hollande at length on economic policy, characterizing his plan as one of “crazy overspending.” He specifically cited Hollande’s pledge to hire 60,000 additional civil servants which Sarkozy lamented would only exacerbate France’s fiscal shortfall. Read more “Sarkozy’s Final Pitch: “We Don’t Want Socialism””

Hollande, Sarkozy Advance to Second Round

Incumbent French president Nicolas Sarkozy and his main, Socialist Party rival François Hollande advanced to the second round of the country’s presidential election on Sunday after winning 27 and 28.6 percent of the vote respectively. Official results were released on Monday.

The two were expected to enter a runoff but far-right candidate Marine Le Pen came in a surprisingly strong third with nearly 18 percent of the vote. Turnout was high at over 80 percent.

The incumbent had gained ground on his left-wing challenger in recent months but opinion polls continue to give Hollande a comfortable, double digit lead over the conservative for the second round in the election which is scheduled to take place on May 6.

Hollande notably tried to rally far-right voters to his cause in his victory speech on Sunday night when he ascribed the Front national‘s rise to President Sarkozy’s supposed squandering of France’s national pride. He also said that the conservative had “divided” the country with extremist right-wing rhetoric.

In an appeal to far-left voters whom he hopes will turn out for him in the second round, Hollande promised to put the national interest over “privilege.” Despite his call for “unity,” the Socialist Party candidate has vowed to fight “the world of finance” and proposed a punitive 75 percent income tax rates for millionaires.

Sarkozy reiterated his populist push in his election night speech. “I know that in this world which is moving so fast, the worry of our citizens to maintain their way of life is the central question in this election,” he said, adding that he alone had the “responsibility to protect the French people for the next five years.”

Sarkozy would be the second French president to lose reelection since Charles de Gaule founded the Fifth Republic in 1958. Hollande would be the first socialist to be elected to lead the nation since François Mitterrand defeated the centrist Valéry Giscard d’Estaing in 1981.

This post was updated with new information.

After Five Years of Sarkozy, France’s Economy Still Stagnant

French president Nicolas Sarkozy will likely make it into the second round of his battle for reelection on Sunday, but his popularity is waning. French voters are tired of his erratic and ineffectual leadership and seem to prefer the bland and managerial Socialist Party candidate François Hollande who, according to opinion polls, would win the runoff election scheduled for May 6.

After five years in office, Sarkozy doesn’t particularly like to talk about his record. He does criticize his opponent’s tax and spending proposals, which would exacerbate France’s gaping fiscal and trade deficits and threaten its position as a core eurozone member state. Read more “After Five Years of Sarkozy, France’s Economy Still Stagnant”

French Election, Proxy Battle Over Austerity

With conservative leaders lining up behind incumbent president Nicolas Sarkozy and socialist parties across Europe expressing their sympathy for his challenger, François Hollande, the upcoming French presidential election looks to be a proxy battle over economic policy.

German chancellor Angela Merkel, who leads a center-right coalition, has been the most vocal in her endorsement of the sitting French president among foreign right-wing leaders. “I support Nicolas Sarkozy in every manner because we belong to friendly parties,” she said in early February.

Merkel rightly fears that Hollande will imperil the fiscal compact that was signed by all European Union member states, except the Czech Republic and the United Kingdom, earlier this month.

Left-wing parties in Germany, the Netherlands and Spain have thrown their support behind Hollande’s call to renegotiate the treaty which requires that eurozone member states reduce their deficits to under 3 percent of gross domestic product in 2013.

Hollande, who is likely to defeat the conservative Sarkozy in the May 6 election, believes that the treaty should be revised to put a greater emphasis on growth and curbing unemployment. He welcomes the support from other European socialists.

“The fact that some have started to think about possibilities, renegotiations and annexes proves there is a growing awareness that this treaty is flawed,” Hollande said in Paris this week.

The leader of Germany’s Social Democratic Party, Frank-Walter Steinmeier, earlier told the Frankfurter Rundschau that “additional measures to promote economic growth” should be included in the fiscal pact. He also said to favor a financial transaction tax which both French presidential candidates support.

The secretary general of the Spanish socialists, who were thrown out of power late last year, also recommended a renegotiation of the treaty “so that there is growth in addition to austerity.”

In neither country, ratification of the text is in doubt because the ruling parties command majorities in their parliaments. In the Netherlands, however, the center-right minority government needs opposition votes to enact the budget charter. Diederik Samsom, who was elected Labor Party leader on Friday, has threatened to withdraw his support unless the treaty is revised to allow more room for fiscal stimulus.

The Dutch were among the staunchest proponents of sanctions for euro countries that break the budget rules and insisted that profligators be forced by the European Commission to rewrite their spending plans if they fail to rein in high deficits.

France had a €96 billion shortfall in 2011 which was equivalent to 7.1 percent of GDP. As a result, it lost its top credit rating from the Standard and Poor’s agency in January.

Both major party candidates for the French presidency have said that they will balance the budget before the end of their upcoming five year term in office.

Sarkozy’s conservatives, currently in government, raised taxes last year to mend the deficit. Hollande would raise them further. He has proposed to levy a 75 percent tax on incomes over €1 million and increase taxes on incomes over €150,000 from 40 to 45 percent. Sarkozy has criticized these plans as “tax policies that discourages work, that discourages initiative, isolate France from the rest of the world.”

Ahead of Election, Sarkozy Advocates Protectionism

French president Nicolas Sarkozy threatened to withdraw from Europe’s open border area on Sunday and advocated a “Buy European” policy for its member governments. The protectionist rhetoric may win him critical right-wing votes in the upcoming presidential election but are likely to invite the ire of European neighbors.

Addressing tens of thousands of supporters in the city of Villepinte north of Paris, Sarkozy said that Europe’s borders had to be fortified to stem the influx of immigrants and cheap products from abroad. He also championed legislative action on the European level to mandate governments to favor homemade products over foreign manufactures and warned that if there wasn’t progress in this area, France would apply such a rule unilaterally.

“I want a Europe that protects its citizens. I no longer want this savage competition,” the embattled French president said. Read more “Ahead of Election, Sarkozy Advocates Protectionism”

Hollande Proposes Tax Hike, Sarkozy Narrows Gap

French president Nicolas Sarkozy narrowed the gap in opinion polls between him and his Socialist rival, François Hollande, for April’s election.

The embattled conservative president, who is fighting for reelection at a time of mounting economic anxiety in France, would win 27 percent of the vote in a first round compared to 31 percent for Hollande according to a recent survey. In the runoff, which is scheduled for May6, the incumbent would trail his opponent by 16 points.

Although he lacks ministerial experience, Hollande is widely liked and promises to increase government spending on education and job training programs. He would renegotiate Europe’s fiscal pact, which requires a deficit under 3 percent of gross domestic product in 2013 and a balanced budget in the long run, and would raise taxes on the very wealthy.

In Paris this week, Hollande proposed to levy a 75 percent tax on incomes over €1 million. He said it was simply a case of “patriotism to accept to pay extra tax to get the country back on its feet again” and argued that it would send “a message of social cohesion” after five years of conservative policies which supposedly favored the rich.

The socialist candidate previously called for the introduction of a 45 percent tax rate on incomes over €150,000. The top income rate is now 40 percent while social taxes that finance health insurance and pension payments are automatically deducted from people’s salaries. There is also a surtax on Frenchmen’s wealth if they own more than €790,000.

The president’s party, which is currently in government, hiked taxes in August and again in November of last year in an attempt to balance the budget. Consumption taxes on liquors, tobacco and soft drinks were raised as was the lowest value-added tax bracket from 5.5 to 7 percent. The top corporate tax is among the highest in the world at 34.4 percent. Total tax revenue was equivalent to nearly 45 percent of France’s total economic output in 2010. Government spending as a share of GDP was nearly 55 percent.

Addressing supporters in the southern city of Montpellier, Sarkozy criticized Hollande’s tax plan. He argued that “tax policies that discourages work, that discourages initiative, isolate France from the rest of the world.”

I believe in paying more to those who work more. I believe in the choice of rewarding talent. Rewarding merit and valuing success are principles that have always been dear to the republic.

Specifically, he proposed a 25 percent pay raise for teachers who agree to work longer hours. This is contrary to Hollande’s promise to hire an additional 60,000 teachers during his first term in office.

The president also hopes to give employers more flexibility to increase working hours in the private sector although he has stopped short of advocating an end to his nation’s treasured 35-hour workweek.

French employees also enjoy five weeks of legally mandated vacation, besides national holidays, and compensatory time off for working overtime. That should amount to some fifty days of paid vacation per year but combined cleverly with “bridges” over workdays that fall between off days, most French actually have a week off nearly once a month.

As a result, French workers are less productive than most of their European counterparts. An hour of work costs $43 on average in France compared to $36 in neighboring countries.

Cameron, Merkel Stand By Their Man Sarkozy

Britain’s and Germany’s leaders seem anxious for their French counterpart, Nicolas Sarkozy, to win reelection in April and May. Despite poll numbers that suggest a crushing defeat for the incumbent French president in the upcoming election, David Cameron and Angela Merkel are standing by their man.

The German chancellor, who, like Cameron, is a conservative and ideologically aligned to Sarkozy, has been explicit about whom she would vote for. “I support Nicolas Sarkozy in every manner because we belong to friendly parties,” she told journalists in Paris earlier this month. In a television interview, the Frenchman said to be “pleased” with Merkel’s support. Read more “Cameron, Merkel Stand By Their Man Sarkozy”

Sarkozy Wants French to Be More Like Germans

Angela Merkel Nicolas Sarkozy
German chancellor Angela Merkel of Germany and French president Nicolas Sarkozy confer in Berlin, June 17, 2011 (Elysée)

In a television interview on Sunday, President Nicolas Sarkozy frankly admitted that his country lagged behind neighboring Germany and urged Frenchmen to accept austerity to revive growth.

The embattled French leader, who is up for reelection in April, pointed out that social taxes on salaries in his country were “double” those across the border; that the Germans had three times as many youngsters in apprenticeships; and that France lost half a million manufacturing jobs in the last decade when German employment grew.

“The German economy chose to prioritize jobs, jobs, jobs,” he said. “If it worked for them,” he added, “why wouldn’t it work for us?” Read more “Sarkozy Wants French to Be More Like Germans”