Au Revoir, Austerity? The French Elections, Round One

Today, France began the first round of its presidential elections. Unsurprisingly, the candidate of the center-left, Socialist Francois Hollande, beat out the incumbent, the conservative Nicolas Sarkozy, by approximately 29 to 26 percent. In a more noteworthy development, Marine Le Pen secured 18 to 20 percent of the vote, a major triumph for her far-right, anti-immigration National Front party. In 2002, Le Pen’s father, Jean-Marie, scored almost 17 percent of the vote, although in that case, that had been enough for a run-off between Le Pen and President Jacques Chirac. Socialists and other leftists rallied behind Chirac, who beat Le Pen in a landslide. This time around, while she may miss the run-off, Marine Le Pen will potentially be the kingmaker in how she directs her supporters in the final two-week campaign between Hollande and Sarkozy.

One might assume that those who voted for the National Front will naturally prefer Sarkozy. Indeed, Sarkozy has sought to woo over those who believe immigrants are taking away jobs from French nationals and that tolerance for Islamic values is undermining traditional French secularism. He has promised to reduce immigration by 50 percent, to do away with separate halal menus for Muslim children in state schools and drawn on fears stirred up by the Toulouse killings. Still, as much as he has tried to court his country’s xenophobes, he has been unable to escape two major problems. The first is that Sarkozy is Sarkozy. Since he first took office in 2007, he has alienated the electorate with his flashy clothes, taste for upscale dining and a brash, rough personality (the U.S. embassy described him as “thin-skinned” and “authoritarian”). Try as he might to dress himself up as an outsider who speaks for the French “silent majority,” there is no escaping that he has developed an image as a “president of the rich” – and not a very charming one, at that.

The second more substantial problem is that Sarkozy has failed to deliver on getting France through the financial crisis. For all his pomp and panache (one of his few advantages over the dull, drab Hollande), Sarkozy cannot deny that unemployment stands at 10 percent (the highest level in over a decade) and that economic growth has been sluggish at best. Moreover, his advancement of austerity measures puts him at odds with a growing number of Europeans who fear severe spending cuts will only make things worse, not better. Up to now, the German government has declared that the only way to end the euro crisis is to reign in profligate governments and forcing them to live within their means – thereby establishing credibility with investors by doing away with increased borrowing or bouncing off growth bubbles. A growing number of critics, however, contend that austerity only leads to more unemployment as public sector jobs vanish and demand consequently falls, leading to less consumer spending and investment, forcing economies into suicidal vicious cycles. Cuts to social programs are never popular, but with their supposed positive aspect failing to materialize in Greece, Italy, Britain, Spain or France, popular attitudes are swarming over to the anti-austerity side.

If one needed any evidence of this, one need only look at the economic platforms of all three major French opposition candidates. Hollande has pledged to draw back on spending cuts and to impose increased taxes on millionaires to finance public investment programs. Until the Toulouse murders prompted her to relapse to her usual Islamophobic rhetoric, Le Pen sounded like a veritable left-winger by pushing a protectionist economic policy that would have France leaving the German-dominated euro zone altogether. Jean-Luc Mélenchon, today’s fourth-placed candidate, represents the Left Front, a coalition of communists and other radical leftists. Mélenchon rejects any talk of balanced budgets at all, endorsing not just higher taxes on the rich but also taking out low-interest loans and raising the minimum wage – all of which would certainly boost consumer spending and spur growth forward. Undoubtedly, some of Le Pen’s supporters will flock to Sarkozy as the only conservative option in the coming Sarkozy/Hollande showdown, but more than a few will prefer the pragmatism of their pocketbooks to the rancor of their racism – joining with Mélenchon’s supporters to Hollande’s side.

Overall, today’s result is not that surprising. Incumbents have not done well in the wake of the financial crisis. British voters turned Gordon Brown and Labour out from Whitehall in 2010. The Spanish People’s Party crushed the ruling Socialist Workers’ Party in November last year, just days after Silvio Berlusconi resigned as Italy’s Prime Minister due to pressure, external and internal, over the debt disaster. It was perhaps simply time for Sarkozy to pay the piper.

Still, it will be interesting to see how a left-wing, pro-growth government will endure against the narrative, pushed by Germany and the IMF, that Europe must stay the austerity course. While French voters may have the freedom to “throw the bums out,” they do not have control over the European Central Bank or world markets. Considering how unpopular enlarging the public sector rather than shrinking it will be to the consensus of cutting a country’s way to recovery, Hollande may have to put his proposals on hold and bend to the mainstream answer to Eurogeddon. If he does not, however, and displays the sort of boldness he is not exactly known for, this election may mean the first real challenge to “austerity as usual.”

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