Sunday, April 15, 2012

The French Elections: Apres Sarkozy,Le Deluge?

As the French prepare to go to elections next week, a number of polls show President Nicholas Sarkozy far behind the Socialist challenger, François Hollande.

The French hold their presidential elections in two rounds, one to determine the two highest vote getters and a second round as a runoff, a sensible rule in a multiparty election.

Right now, the polls show Sarkozy trailing Hollande by double digits.

Sarkozy got a small boost and was leading after his handling of the Toulouse murders, but the bump appears to have disappeared for now. Many of those votes will likely go to Marine Pen and the National Front in the first round.

Hollande has his own challenger on the far Left, Jean-Luc Mélanchon and his Le Parti de Gauche (literally, 'The Leftist Party), but they're probably not going to bleed as many votes from the Socialists as The National Front will from Sarkozy, at least in the first round.Adding to the mix is Sarkozy's personal unpopularity with a significant part of the French electorate.

The chief issue in France, as in many elections held this year around the world is the economy.

Hollande is essentially running on a 'tax the rich' platform, pledging to cure France's deficit by promoting what he calls 'pro-growth' policies to promote jobs and education, although it's difficult to see exactly how he does that by increasing taxes and regulation on business. Economic conditions aside, it's already problematic to hire employees in France because of the legal difficulties in firing them if they perform poorly and the high costs of paying France's lavish unemployment compensations. Increasing taxes merely means that businesses will simply increase the price they charge consumers, something that always seems to elude the Left.If Hollande is talking about government jobs, those ultimately still have to be paid for by someone...and as in the United States, there aren't enough of 'the rich' to do it even if you turn them into 'the penniless'. Of course, when it comes to welfare state economics, the details are usually fairly fuzzy and unfocused.

Hollande is also questioning EU policies, most notably the austerity agreement on debt and deficit control that came about during the eurozone crisis. He's saying openly that he would insist on amending it.

Hollande is against any cutbacks in France's social welfare program, saying that the austerity agreements by the EU would be meaningless if not accompanied by the sort of 'pro-growth' he envisions in France and in Europe generally, and he doubtless appeals to many of the French who have been questioning the EU's policies - and Germany's dominant role in them - for some time.

"This I say clearly: financial markets will not lay down the law in France," he recently told the business weekly La Tribune.

In his stump speech, one of the money quotes is, "I will be the president of a republic much stronger than the markets, a France stronger than finance."

Sarkozy is basically warning of le déluge économique if Hollande gets elected, claiming there will be major financial turmoil if Hollande and the Socialists win the election.

"What fires up the financial markets and speculation is when a country does not repay its debts, reneges on its commitments and embarks on a path of ill-considered spending," Sarkozy told TV news channel I TELE.

"Mr. Hollande, by promising to raise spending without any commitment to cutbacks, is setting the stage for a confidence problem (in financial markets)," he said.

All in all, an interesting match up that may serve as a harbinger of where things are headed in Europe.

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