Presidential Campaigns in France – Missing the Point? « Euro

Presidential Campaigns in France – Missing the Point?

April 19, 2012 by

By Daniela Schwarzer

In April and May 2012, all eyes in the EU are on France. The presidential elections come at a key moment. The crisis in the euro area is re-gaining pace, with bond market pressure once again increasing on Spain – and serious questions asked about investors’ confidence in France.

 

The campaigns of the two main candidates, the acting president Nicolas Sarkozy and socialist contender Francois Hollande, have almost entirely discarded the pressing problems the French economy faces. Over the last few years, the country has lost competitiveness, with unit labour costs rising considerably. While France does have a few successful industrial players (automobile, aeronautics, etc.), the general trend is de-industrialisation. Since 2004, the country records external trade deficits, with a rising tendency. France faces growing public debt, attaining 90% of GDP this year. While both candidates have claimed that they would balance the budget (Sarkozy has promised zero deficit for 2016, Hollande for 2017), they have not said how they will attain this target – in particular which expenditure they would cut of an overall expenditure to GDP ratio of 56 %. The medium- and long-term budgetary perspectives (including the high implicit debt levels hidden in the social security systems) have not been worth mentioning in a campaign. Several candidates, among them Hollande, have even promised to unravel Sarkozy’s timid pension reform which raised the French retirement age from 60 to 62. So, in a nutshell, voters are not prepared for the adaptation needs of the economy and public spending in France. But markets won’t have mercy, so the new political leaders will have to stage a moment of truth to their electorate rather sooner than later after the second round of the presidential elections in May and parliamentary elections following in June.

Many observers state that the campaign was equally weak on Europe. Indeed, none of the candidates has put forward a proposal for further developing the EU or the eurozone. Meanwhile, in other countries, slowly but surely, discussions on euro area crisis management and governance reforms are evolving into a rather fundamental debate on the future political nature of the EU, subsidiarity vs. further competence transfers, legitimacy crises, democratic deficits and the like. The French presidential candidates have missed out on this one.

 

But the EU does play a role in the election battle in France, though not the way some may have liked. Poll data show that candidates with outright EU-sceptic and anti-globalisation positions gather roughly 30% of the votes. This has surely influenced the tone chosen by more moderate and traditionally pro-European candidates. There has been a threat by the acting president to withdraw from Schengen, unless the EU would take a more restrictive stance on integration, there have been proposals perceived as ’attacks’ on the European Central Bank’s independence. These proposals have been done away with as campaign noises which no realistic follow-up by some, or have been seen as outright provocations by others. There is yet one initiative by the socialist candidate which may make some difference if he should win the elections. Francois Hollande has made it clear that he would not let France ratify the Fiscal Compact unless there is an additional growth initiative. When he first voiced this condition, it stood against the European mainstream and was treated as a threat to Europe’s renewed quest for stability. Only a few months later, and after new discouraging data on the euro area periphery, the question how to foster growth is of increasing concern, even to right-wing governments which, for months, have insisted to put austerity first and refused to debate growth policies. Hollande’s proposal – and the reactions to it – was significant in a second dimension. It is the first time that left-wing policy proposals play a role in the euro area debate, otherwise shaped by a strong liberal consensus. At one point in March 2012, when Hollande gathered a group of left-wing political leaders from other EU countries for a public campaign event, Paris even seemed to become the crystallisation point of a new left-wing debate over re-shaping the euro area. No matter how on judges the content of the proposals made, it is legitimate and high time to bring a left-right-debate where it belongs: The reforms of the governance structures in the euro area agreed upon so far are not politically neutral. The new rules enshrine economic and budgetary policy choices, so it is legitimate to debate them, broadly and controversially.

 

Dr. Daniela Schwarzer is the Head of the Research Division EU Integration at the German Institute for International and Security Affairs, Stiftung Wissenschaft und Politik (SWP) in Berlin.

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1 Comment

  1. Obviously, the winner of the election is going to have to be an active participant in the development of the eurozone. The people of France seem to be concerned about the economic climate as well. What are the steps France needs to take in order to be more effective on this front, and what specific issues will the winner of the French election have to focus on immediately in your opinion?

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