French Left-turn in pursuit of traditional presidency

Francois Hollande's victory signals departure from "Merkozy" approach to Europe's economy.

By TIMOTHY SPANGLER
French presidential candidate Hollande 370 (photo credit: REUTERS)
French presidential candidate Hollande 370
(photo credit: REUTERS)
This week, Socialist Party candidate Francois Hollande defeated the idiosyncratic incumbent, Nicolas Sarkozy, to become the next president of France.  At a time of austerity, the defeat of staunch German ally Sarkozy demonstrates that some French voters are questioning the benefits of austerity as the principal engine towards recovery.  Hollande’s narrow victory makes him the first Socialist President of France in 17 years.
Hollande has promised a new direction for his country and Europe.  Instead of further budget cuts, growth will be his economic priority, although it remains unclear where this growth will come from.  He sees France as a nation worn down from the divisions and cuts inflicted during the Sarkozy years.
The German view on the financial crisis is markedly different from Hollande’s.  To German Chancellor Angela Merkel, the best prescription available is balancing budgets and cutting future spending.  Sarkozy was seen as so core to the success of Merkel’s success in implementing this cure that the popular press awarded the two an honor normally received for celebrity couples.  Their names were combined in a single honorific: “Merkozy."
Hollande’s first official trip will be to Germany, but it is unclear what leverage he will have in the short-term.  The German-French relationship will be a key determinant of how successful Hollande can be at implementing his policy proposals.  Hollande must also follow up his personal victory, which came with a razor thin margin, with a wider victory in next month’s parliamentary elections.  Lack of a convincing majority would represent another significant hurdle.
Was the election actually more a rejection of the frenetic and America-phile Sarkozy rather than a choice for the bland and reassuring Hollande?
Sarkozy was clearly undone by his growing unpopularity.  Many French had grown weary of his theatrics and clearly felt more comfortable with a traditional leadership style.  His supporters will argue that the global financial crisis largely hindered him from pursuing his plans to re-invigorate France.  Fatigue over Sarkozy’s “in your face” personal style seemed to be the deciding factor, rather than a comprehensive rejection of his policies.
Unlike Sarkozy, Hollande has made clear that he would not micromanage the actions of his government.  Instead, he would revert to the long-standing tradition of earlier French presidents, who maintained an Olympian detachment from the mundane details of day-to-day governance.
Should France’s allies and trading partners be concerned about an imminent sharp turn to the Left?
For a look at socialism in action, one can turn to Bolivia for a concrete example.  Evo Morales was elected, and subsequently re-elected in 2009, as president of this commodity-rich country on a left-wing populist campaign manifesto.  Last week, Morales nationalized a Spanish electricity company.  This comes six years after he nationalized the Bolivian natural gas industry.  Given the questionable benefits that have come to the country from the gas nationalization, it is unclear how the last expropriation will benefit the many impoverished Bolivians.
Bolivia, like France and the US, needs private investment to drive growth, but cheap theatrics aimed at a narrow band of core supporters does little to entice international capital to your country to seek meaningful investment returns.
At present, there is no indication that Hollande will follow such a radical course.
Hollande is no ideologue.  Many pundits predict Hollande will soon drift towards the political middle-ground, like his Socialist predecessor Francois Mitterand.  Mitterand’s first years in office saw several attempts at radical change, but eventually the need for stability overrode the desire of the party faithful for dogmatic policies.  Hollande, an experienced party official over the past two decades, may soon demonstrate similar pragmatic tendencies.
Hollande is expected to bring a more conciliatory, respectful and deferential tone to the presidency, which is fundamentally a monarchical role created to suit the personal strengths and weaknesses of French war hero and icon, General Charles de Gaulle.  Whether that is what France actually needs right now remains to be seen.
In Hollande, the French have not so much lurched to the Left as they have selected the ordinary and the familiar.  With his receding hairline and glasses, Hollande represents an image of respectfulness and dignity that his predecessor, nicknamed “President Bling," unfortunately lacked.
France faces massive deficits and stagnant growth.  The stark reality of the global economy will limit any urge to experiment or dabble in unproven strategies and techniques.  Sarkozy ultimately failed in his attempt to conduct a systematic reform of French institutions, so it will be left to his successor to address current challenges through the available tools.
For so long as the Euro survives, France will be unable to take the easy way out of its problems by simply de-valuing its currency.  Compare Iceland with Ireland and see how the ability of the former to devalue has allowed it to avoid the pain and suffering that the latter must now live with.  As a result, Hollande must look at cutting costs in order to regain French competitiveness.  This will mean making unpopular choices.
With his election victory behind him, Hollande should take the time to re-examine his campaign promises in the cold light of day and begin to fashion effective policies that will secure both his country’s and Europe’s economic stability and future growth.
The writer is a commentator who divides his time between the United Kingdom and Southern California. He has appeared on CNN, CNBC, BBC and Sky News, and has been featured in The New York Times, The Wall Street Journal, The Washington Post, The Financial Times and The Economist.


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