The pendulum has swung full swing again and a plebiscitary air has enveloped the euro zone, breaking the dictatorial flavour that the imposition of President Mario Monti in Italy as well as the appointment of the Greek administration had given the euro system. Indeed with elections on the fiscal stability Treaty due in Ireland at the end of May and with the French citizenry yesterday going to the ballot box for the first round of the presidential elections, democracy for now it seems, has been restored to Europe.
Nevertheless as my cartoon suggests I want to take a closer look at the French presidential election race.
Last night, the French people spoke in great numbers and with a clear voice, (Hollande, 28.6%; Sarkozy, 27.08%; and a turnout, ≈ 70%) handing the Socialist challenger François Hollande a clear lead after the first round of voting and setting the stage for an intriguing final run-off set for May 6th. Certainly a day’s balloting across France has confirmed recent polls that consistently suggested that Nicolas Sarkozy is to be the first French president in 30 years to lose a re-election campaign.
Nicolas Sarkozy, the centre-right incumbent and leader of the UMP (Union pour un Mouvement Populaire), who campaigned as a forceful outsider in 2007, took the highest office in France fresh faced, full of optimism and committed to bringing Anglo-Saxon free enterprise to France. However the incumbent has suffered through a 5 year term mired by economic malaise and unable to bring life to many of his commitments Sarkozy must face up to a poor record and a legacy of unfulfilled pledges as well as an insurgent and capable challenger in the form of François Hollande, leader of the Parti Socialiste.
Nicolas Sarkozy, the son of a miner and Hungarian migrant who 5 years ago promised une rupture with the past certainly has much to answer for: indeed over the past 5 years his country’s global influence has waned; his pledge to reduce unemployment to 5% has flopped and unemployment now stands at 10%; youth unemployment remains painfully high and fears are abound for a lost generation; the real economy is faltering and French industry has lost ground; growth remains low and the nation’s credibility was dealt a heavy blow under Sarkozy’s watch when its sovereign rating was downgraded. Certainly for these failings and more anti-Sarkosyism is rife which simply consolidates the case of the Socialist presidential challenger.
If last night’s results and Hollande’s recent widening surplus in opinion polls are anything to go by it seems that the French electorate are still looking for the rupture that Sarkozy promised 5 years ago; certainly ever since Hollande won the Socialist primaries and lodged his nomination in October 2011, the leader of the Parti Socialiste has consistently topped the polls and as such it is becoming increasingly likely that May 6th will see a manifest shift from the Right to the Left with François Hollande becoming the first Socialist leader in 17 years.
Hollande has already made firm promises for office that would see his Socialist administration unfolding an etatist programme and the deliverance of a rupture from the economic liberalism of recent years: pledges for increased taxes and spending as well as a crackdown on banks and executive pay which have filled the markets with worry and suspicion.
However many pressing questions arise when one presents such a scenario: namely, in which direction would Hollande take the Hexagone? How would the markets react to a socialist leader in charge of the Europe’s second largest economy and trading nation? How would an already turbulent euro zone react to the uncertainty that would be triggered if the likeable apparatchik, who who has promised a renegotiation of the fiscal compact, secured his nation’s highest office? Would a Hollande-led France have a chilling effect on the Franco-German axis in Europe? Certainly ‘Mer-londe’ doesn’t have the same ring to it; however could a potential breaking of the Franco-Allemagne monopoly on European policies bring an égalité to Europe?
All these questions, uncertainties and more remain to be answered but it’s clear that François Hollande has done much to capitalise on the electorate’s fatigue of the economic crisis, structural reforms and of the incumbent Sarkozy. Indeed the majority of political analysts are calling Hollande to secure a long term relocation to the Elysée palace this summer.
However with the potential for such a dramatic shift in the French and European political landscape, very real political risks could emerge and with a fresh wave of market crisis on the horizon I see long term French and European political and economic certainty in the hands of Sarkozy.