Across the Channel


My true adversary . . . has no name, no face; he belongs to no party; he will never declare his candidacy. He will not be elected, yet he governs. My enemy is the world of finance’.

After a narrow defeat to the author of that quote, Nicholas Sarkozy faces a bruising uphill fight to regain the initiative and retain the Élysée.  After 17 consecutive years of centrist presidents, the polls place François Hollande 7-10% ahead of his opponent in the race to the presidency, in a clear disruption of the pan-European centre-right ascendancy in the wake of the economic downturn. Mr Sarkozy must manage a delicate balancing act: he must use his remaining campaign time to garner the 6.4 million votes secured in the first round by National Front candidate Marie Le Pen, without alienating the vital centre ground, on which he relies for much of his support.

The French electorate need to consider their vote carefully. The rhetoric from Mr Hollande’s camp is irresponsible and misleading: the election is being presented as a referendum on Mr Sarkozy, when both France and Europe are desperately in need of a stable government with a sensible, realistic long term strategy for recovery and growth. This election cannot be a ‘reaction against austerity’, as Mr Hollande’s campaign has branded it, but rather an affirmation of crucial decisions necessary for securing long term fiscal stability. Both candidates must present a coherent vision for economic growth and securing market confidence. Mr Hollande’s proposals for renegotiating the EU austerity pact to include mechanisms for fiscal rejuvenation have been met with accusations of financial irresponsibility. Meanwhile, his relations with business and wealth creators remain sour, with proposals for a 75% tax on top income earners driving many French citizens to consider visa applications to the UK.

Mr Hollande must understand that challenging the French financial sector will have a particularly disastrous effect on the availability of credit for small businesses across the country, which constitute the engine of economic growth. The private sector relies on banks for loans; a mass exodus of bankers and executives overseas will mean French businesses will have a tough time standing on their own. Following Mr Hollande’s win on 1 May, France’s CAC 40 equity index plummeted, indicative of the apprehension that the financial world has to a Hollande presidency. Additionally, the rating agencies Moody’s and Standard & Poor’s have given France a ‘negative outlook’ in recent days, the first step towards a downgrade and substantially higher borrowing costs. Investor confidence is paramount to a strong economy and Mr Hollande has yet to gain the vital trust of business leaders. With comments like, ‘My enemy is the world of finance’ Mr Hollande will find it very difficult to get the private sector onboard. As the world follows the French election with a keen eye, Mr Hollande has yet to persuade the international community that he understands the responsibilities he would hold in solving the Eurozone crisis as leader of Europe’s third largest economy.

France’s fiscal policies over the next four years will serve as a model for which many smaller nations may follow. France has a clear choice in this election between two radically different visions of economic progress. If one thing is clear, it is that whichever path French citizens embark upon on 6 May, there is no turning back.


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