The first round of the French presidential election saw Socialist candidate Francois Holland lead by 1.5% with 28.6% of the vote. For Nicholas Sarkozy, it is the first time in modern French politics that the incumbent president has failed to win the first round. Hollande is tipped by many to extend his lead with the second round on May 6. So with the election of a Socialist president looking increasingly likely, what impact would this have for France and wider Europe?
Hollande has called for growth-led policies to reduce France’s rising government debt level, rather than Sarkozy’s austerity drive. He condemns “saving for saving’s sake,” suggesting typical Keynesian measures to boost economic growth. This is a risky strategy, warns Sarkozy, in light of the recent financial crisis.
It is also at odds with the EU’s fiscal compact, a plan to ensure stricter budget discipline within member states in an attempt to stabilise the Euro and ensure long term debt stability.
Hollande warns that he will veto the agreement, which has already been signed by all EU members except the UK and the Czech Republic, if he feels it does not adequately promote growth. He proposes the introduction of Eurobonds as well as extending the powers of the ECB –coming in strict opposition with German chancellor, Angela Merkel, who unsurprisingly endorses Sarkozy’s campaign.
Alongside growth, Hollande’s plan to reduce national debt looks to reverse tax breaks given to the wealthiest. He claims his 75% income tax on earnings over €1 million, extreme even for many members of his own party, is a “patriotic act,” a “signal of social cohesion.” Widely condemned by his political opponents, many are fearful that the ‘fiscal confiscation’ could spark an exodus of France’s wealthiest to neighbouring tax-haven Switzerland. He also hopes to reverse Sarkozy’s unpopular decision to increase the retirement age from 60 to 62, allowing those who began work at 18 to retire at 60 once again.
Despite his spending policy, Hollande hopes to balance the French budget by 2017 – just one year later than Sarkozy. Unsurprisingly, the socialist also holds much more liberal views on issues such as gay marriage, which Sarkozy opposes, and gay adoption.
The unexpected first round popularity of far right candidate Marine Le Pen, placing third with nearly 20% of the vote, has brought the issue of immigration to the forefront. The surge in support for her party, Front National, up to 17.9% from 10.4% in the 2007 presidential elections, signals the ever-growing importance of immigration on the French political agenda.
Sarkozy, meanwhile, has been quick to entice right-wing voters to join his cause, outlining a strong commitment to cutting immigration and deporting those who come to France illegally.
But the first round results have shown the strength of Hollande’s socialist politics in a troubled economic climate. The high turnout rate of 80%, along with the extent of the support for both opposition candidates Hollande and Le Pen, have highlighted the unpopularity of Sarkozy and the desire for change.
A more socially liberal government, with a willingness to stimulate growth through spending whilst shifting the burden of taxation to the rich, may hold the answer to France’s difficult economic recovery; yet Hollande’s rejection of the fiscal compact is likely to cost France its close relationship with Germany and perhaps further delay the European-wide action needed to remedy the continuing crisis.