François Hollande’s tight victory has started frightening those who are still firm believers in the benefits of liberalism and further reductions to public deficit. Indeed, and although his economic program has yet to be clarified, the new president insisted during his campaign on the necessity for more justice and equity to prevail in France. In people’s minds, this usually means more financial restrictions. Coupled with the Socialist traditional allocation of subsidies to citizens, some may fear France could head towards a Greece-like situation.
None of these fears are justified. François Mitterrand himself firmly defended Socialist policies before suddenly shifting to a liberal position in 1983, two years after he came to power. Since then, the Socialist party has remained a promoter of capitalist development.
Hollande is pragmatic. Whilst he may not implement tough restrictive policies like the ones promoted by Nicolas Sarkozy, nothing indicates he will support policies based on increasing France’s fiscal deficit. The European Union is in crisis, and so is, to a certain extent, France. Any false move could both accelerate the general distrust in the Eurozone and have a negative impact on the country’s ratings.
In 2007, Sarkozy won the presidential elections thanks to his “social speech”. Today, Hollande has been trusted by French electors for the same reasons. Nevertheless, the newly-elected president shows no signs or willingness to go against what his international counterparts expect. Both Barack Obama and Angela Merkel called him the very evening of his victory: a sign that he will face strong demands to keep on reducing the country’s deficit.
Hollande’s lack of charisma may be a handicap for him. Whichever steps he suggests, he will find it difficult to convince his European and international counterparts of the need to slow down the restrictive policies currently promoted in the Eurozone. In parallel, French citizens’ expectations regarding employment and salaries will also have to wait. France has no real possibilities to suddenly rise to Germany’s level.
With all this in mind, it’s clear that panic is not justified at all. As a whole, Hollande’s policies will most probably be based on further reductions to France’s fiscal deficit. His sticking to the demands of his European counterparts may prevail, which will end up reassuring markets. Clearly, Hollande is not planning to allow Socialism to get back its original meaning.