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Published: June 2012
In the wake of the French Presidential Elections, Ruth Jones considers the results and their implications for Europe.
THE REIGN OF President Sarkozy has come to an end, and the world now looks on with interest. After 17 years of centre-right Presidents, how will France fare under the self- styled “normal choice“ - perhaps a name that his spin doctors coined for him after the press began to refer to him as “Flamby“ (the ‘flan’)?
Wave your tricolore, the tide has changed, all hail the dawn of the second Socialist leadership of the fifth Republic! Caution to the victor, however; the incoming president has inherited a debt at over 80% of GDP, and is now the captain of a great ship that has reached choppy waters.
François Hollande made it clear in his manifesto that he wanted to set France (and Europe) on a new course: he would preserve the French way of life with a social welfare model, raising the minimum wage, hiring thousands of new teachers, watering down the retirement age, and bringing French troops home from Afghanistan by the end of 2012. Most importantly, he promised a seductive alternative to Merkozy’s austerity measures: growth, pledging to reduce the deficit by 3% in 2013 and increased spending by 20 billion Euro over 5 years.
It looks as though he wants to take the rest of Europe with him. This is of course easier said than done, and many feel that he will not succeed. In any case, it will certainly shake things up. Already, there is a suggestion that he may look beyond Germany for support.
How will Germany respond, now that Merkozy is no more? When discussing Europe, General de Gaulle described Germany as the horse, and France as the jockey. By the end of Sarkozy’s presidency this description suited the Merkozy team dynamic well: not only did Merkel openly back Sarkozy, she even offered to join the election campaign. But now, reportedly much to Merkel’s chagrin, Sarkozy has been replaced with a new—and less experienced—rider.
So what will the post-Merkozy motor of Europe look like? With the Eurozone crisis playing out and Greece sitting on the naughty step, the Franco-German relationship may never have been more important. Jacques Attali, one of Mitterrand’s special advisers who is now one of Mr Hollande‘s own mentors wrote that „The principal challenge of the term in office he is starting will be the actual survival of the European Union.“ How Hollande plays his hand with Merkel will be of fundamental importance. Flan’s plan challenges the austerity doctrine of his predecessor, shifting the agenda to growth. In his campaign he promised to renegotiate the German-led Fiscal Pact, signed by 25 of the 27 European states, which would limit public spending across the European Union (EU), and create a new bailout fund. At the press conference following his first meeting with the German Chancellor, he even dared to utter the word ‘Eurobonds.’
Meanwhile, Merkel is replaying her favorite stuck record, the austerity blues, standing by the original model of balanced budgets via higher taxes or spending cuts. Hollande, on the other hand, is jockeying for a new tune, having got the job with promises of growth-oriented austerity alternatives.
Have we reached a political stalemate? Very early on, the French media changed the nickname of the new relationship from Merkel-Hollande to ‘Merde.’ As one Franco-German colleague dryly remarked, “what’s the point? He can’t change anything!”, highlighting the seeming impossibility of reconciling vastly different economic approaches.
It would seem, however, that both Merkel and Hollande realize the magnitude of what is at stake, and that something must be done. They understand that compromise will have to play a role. Furthermore, with the 2013 elections on the horizon, Merkel is under pressure domestically from the main opposition, the Social Democrats, who have said they will not ratify the Fiscal Pact in the Bundestag unless it includes growth measures.
As Claire Demesmay, political scientist at the German Institute for Foreign Affairs (DGAP) in Berlin points out, ”They are condemned to get along, even if real differences exist [...] The financial markets and their European partners are watching them, they know that they have no choice.”
Hollande has openly contemplated the changes in the nature of the Franco-German partnership in the European context over time. In an interview with Slate magazine before the second round, Hollande questioned “the idea of a duopoly,” noting how the balance has changed: “The Franco-German relationship has been exclusive. European institutions have been neglected and some countries, notably the more fragile ones, have had the unpleasant feeling of facing an executive board.“
Yet there does seem to have been some progress. German officials have remarked that Merkel is using the word ‘growth’ more now than she has in past Eurozone crises. Significantly, she has stated that she will accept a growth commitment to be attached to the stability pact. After the G8 meeting at Camp David, Obama declared that all the leaders “had agreed growth and jobs must be our top priority.”
Merkel is still adamant that “budgetary discipline [and] budget consolidation” coincide with growth measures. On the other hand, it would be politically difficult for Hollande to back away from his pledge to renegotiate the pact. At this early stage nothing is set in stone: the proof will be in the pudding.
Greece will be the first test of the new relationship: while Merkel insists that Greece agree to all bail out conditions if it wants to remain in the Eurozone, Hollande stresses the importance of Greece staying at all costs.
Hollande’s promise to withdraw French troops from Afghanistan by the end of 2012—two years before the date agreed by North Atlantic Treaty Organization (NATO) at its 2010 Lisbon summit—may prove another sticking point. Both the U.S and United Kingdom are concerned that this could cause a chain reaction amongst NATO members, unravelling the carefully planned phase out. Germany has pointedly reminded Flan that troops from all countries entered at the same time, and should therefore leave at the same time. Diplomatic sources have stated that there is room for manoeuvre and that Hollande will be prepared to compromise.
What can Hollande realistically accomplish? He will need diplomatic dexterity, especially when dealing with Chancellor Merkel. However, the rest will hang on the outcome of upcoming elections. He needs support, both in France and within the EU. He will need to win enough seats in June’s legislative elections to have a strong position in the Assemblée Nationale, essential for his domestic agenda. In Europe, he might find support in the shape of the countries that have been burned by austerity: Greece, Portugal, Spain and Italy are likely allies. In the run up to the second electoral round, the President of the Central European Bank, Mario Draghi called for the creation of a growth pact, reinforcing Hollande’s position. Although Hollande is unlikely to pander to the U.S. in the way that Sarkozy did, their first meeting was allegedly a success, and Obama’s endorsement of growth in Europe will surely be a useful bolster.
Many felt that the outcome of the 2012 French elections was more a vote for change than an endorsement of Hollande per se. Be this as it may, Hollande certainly has a vision for France. He may lack experience, and he is no oratorical heavyweight, but perhaps with the wind behind him and the right approach, he will be able to make a move towards change. Flan is not that bad, as puddings go.