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France

Hollande pleads for patience as French economy stalls

Text by Tony Todd

Latest update : 2012-11-14

With French President François Hollande lagging in the polls and with the majority of the French worried about the economy, reducing debt and unemployment were the central issues at his first big face-to-face with the country's press.

French President François Hollande on Tuesday said he wanted to be judged on his long-term economic achievements in his first major press conference since he was elected.

Despite the conference's focus on unemployment and France's stagnant economy, the president was able, when finally asked about foreign policy, to announce that France would be the first country to recognise Syria’s newly-formed opposition coalition.

It was, he said, the "sole legitimate representative of the Syrian people and thus as the future provisional government of the Syrian people.”

The conference, which took place in the ornate dining hall of the Elysée Palace, was Hollande’s first six-monthly meet-up with the press, which he promised would become a regular event when he was elected in May 2012.

‘Decline is not our destiny’

Big press conferences are a relatively new concept for the French presidency, with recent conservative administrations much more coy about submitting regularly to such direct public scrutiny.

And it showed: when the president took to the podium, most of the 400 assembled journalists had no idea whether or not to stand up. A few did, but they promptly sat down again when they saw that no one else was following suit.

Hollande spoke for half an hour -- in what he had previously said would be “a lesson” on his first six months in power -- dealing mostly with France’s huge economic challenges before submitting to questions that, for the most part, stayed on French issues and allowed the president to stick to his script.

Six months into a Socialist administration, Hollande is suffering in the polls and the French economy is in deep trouble. Voters’ first concern is to get France back on the rails.

Hollande told the conference that sorting out the economy was his number one ambition: “Decline is not our destiny. I can understand the doubts that have been expressed.”

“The only valid question in my eyes is not the state of public opinion today but the state of France in five years’ time.”

Getting out of debt

Hollande said he wanted to reduce public debt by 50 billion euros over the next five years.

“I’ve made the decision to force the pace, to bring France out of debt and to balance the public accounts,” he said. “We should be able to do much better as a country with lower public spending.”

Reducing public spending, which risks putting France’s Socialist government at odds with the country’s powerful trade unions, was just the first step, he said.

The next was to improve the competitiveness of French industry and to bring the country’s economy out of the doldrums.

Hollande said he had taken on board a report by former EADS boss Louis Gallois, who said French businesses needed lower employment charges and greater flexibility in hiring and firing staff in order to remain competitive in global markets.

His mission, he said, was to boost growth and reduce unemployment, which he admitted was likely to continue to grow for at least a year.

“These are the only results that I want to be judged upon,” he said.

Backtracking on VAT

These expensive measures would be paid for through a mixture of public spending cuts and a slight rise in VAT, a tax so hated by France’s left wing that Hollande referred to it, with a glimmer of the humour for which he is famous, as “merely a restructuring.”

VAT, which will go up to 20 percent, is the subject of an intense debate in France. The left argues that it reduces the spending power of ordinary people while the rich are proportionately less penalised. It also raises a huge amount for the public purse.

Hollande did insist, however, that France’s restaurants would be spared “once and for all” and that their VAT would remain fixed at 10 percent.

All’s well with the Germans

Hollande brushed aside talk of strains with Germany over concerns in Berlin that his plans to boost the French economy did not go far enough.

“We speak to each other frankly, the chancellor [Angela Merkel] and I, but we don’t teach each other lessons because Franco-German relations aren’t based on lessons, except perhaps on the lessons of history,” Hollande said.

“We in France more than others have to prove our seriousness and our competitiveness, more than Germany, and that’s what we are doing. And Germany... has to prove its solidarity, which is not easy when a country has made such an effort to become what it is today.”

A dip in the foreign policy pool

Hollande’s big foreign policy announcement, when the question finally came up, was that France formally recognised the legitimacy of Syria’s newly-formed National Coalition for Opposition and Revolutionary Forces.

Hollande ruled out any kind of military intervention, however, while the UN Security Council remained deeply divided, with Russia and China constantly vetoing any direct action.

He also held back from announcing any direct military intervention in Mali, where six French nationals are being held by terrorist groups.

But France would provide “logistical support” for African nations who wanted to remove the Islamists who have taken over the north of the country, he said, adding that “if the terrorists withdraw from North Mali, there will be no need for military intervention.”

Date created : 2012-11-13

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