By: Dr. Mike Campbell
The second round of the French presidential elections was held on Sunday and the result saw a socialist, Francois Hollande, elected to the presidency for the first time in 17 years. Mr Hollande’s inauguration will take place later this month and then the French go the polls again in June to elect a new government. The margin of victory for Mr Hollande was relatively narrow in the end: 51.3% to 48.7%. The turnout was 80%.
The decision will cause a degree of consternation in EU circles and with the German government. The new president campaigned on a platform where austerity measures would be toned down in favour of growth stimulation packages and has vowed to have the terms of the closer fiscal union accord revised – something the Germans, in particular, will be implacably opposed to.
Austerity measures are hugely unpopular with the citizens who have to bear the brunt of them in terms of reduced public services; future pension rights; retirement age hikes and, of course, higher levels of unemployment. It makes for an excellent populist platform. Mr Hollande has said that he wants to roll back retirement changes for certain groups of society, enabling them to retire at 60 rather than 62. He will shortly be confronted with the difference between developing policies in opposition and trying to implement them in power against a backdrop of conflicting priorities and international considerations.
France has the second largest economy in the Eurozone after Germany and the relationship between the German leader, Angela Merkel and Nikolas Sarkozy was marked by a fair degree of common ground.
The Euro fell on news of the French result, but has regained some ground in this week’s early trading. The situation has not been helped by the Greek election over the weekend which saw the coalition partners lose a large share of the vote. Greek politicians are scrabbling about trying to form an administration of national unity, but it could be that a government is formed from far left wing elements and groups opposed to the austerity measures forced on the nation as a consequence of two IMF/EU bailouts. Talk of Greece being forced out of the Euro has picked up again.