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Why Hollande’s victory is not (necessarily) bad news for the EU

May 9, 2012 3 Comments ››

Photo: Rodrigo Sepúlveda Schulz / Flickr

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.


  1. What’s worrying is Hollande himself!

    France wakes up to a Socialist President, but a nervous Europe, to a promised “fresh start”. What is one to expect in this time of crisis?! There certainly seems no clarity in sight, in light of dramatic changes.

    Internationally, Nicolas Sarkozy for one is seen as the latest casualty of the financial crisis! not just the Socialists taking up Presidency in France. Following the announcements of poll results on Sunday evening, stocks across the globe plumetted! Sarkozy has arguably been quite a strong leader internationally. His fall has sent jitters across the globe as to the severity of instability in Europe.

    Hollande may share or begin to cultivate a better rapport with German Chancellor Merkel but for the moment, Mme Merkel looks increasingly lonely, losing her unloved but most important ally on the euro crisis, Sarkozy, only a couple of weeks after the fall of her like-minded fiscal disciplinarians, the Dutch government of Mark Rutte.

    But he’s never held high political office, and now has in 2 weeks hugely important international meetings on his agenda: G8, Camp David, NATO, National Assembly Elections, G20 (Mid June), EU Summit (June 28,29)..

    The only thing that can go worse than this is if Mitt Romney becomes President too.

  2. AMINA says:

    I wish the author would stick to the Middle Eastern topics and analysis, in which he is rather good.

    Of course the fears are justified. Before one year ends, the French will come out on the streets to demonstrate against austerity measures Francois Hollande will have to impose on them.

    Socialism, in its form promoted in France, is anachronical and is supposed to have ended with the fall of the Berlin Wall. Modern social democrats accept market economy.

  3. Conchita Díez Medrano says:

    It seems to me that all European politicians today are aware that deep changes are needed in the face of new and powerful emerging economies, and that these include budget deficit cuts. Where Merkel or Sarkozy seem to differ from Hollande is on the ‘how’ these measures are to be applied. Indeed, in contrast with Merkel, Hollande seems intent on striking a balance between austerity and growth measures to guarantee social equity, one which requires ‘time’. Actually, Hollande’s views are close to those recently voiced by IMF director Lagarde, and go along the lines of adapting the implementation of austerity measures to each EU country’s particular case. In the face of a Merkel who would seemingly want to give the same medicine to all, Hollande may be a window to personalised treatment, i.e. the kind of treatment that is essential to prevent unnecessary social-side effects.

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