Hollande to pursue ambitious European growth plan
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French President François Hollande has presented European leaders with a series of growth-boosting measures, including €120 billion worth of measures to stimulate growth across the continent, French media reported Sunday.
AP - Francois Hollande is the man in charge after his Socialist Party swept France’s parliamentary election. Voters welcomed the French president’s vision of injecting government money into Europe’s economies in hopes of helping the joint euro currency stave off disaster.
Socialists now have an unprecedented lock on politics in France, and plan to use it to raise taxes on big banks and oil companies, levy a 75-percent tax on incomes higher than €1 million ($1.26 million) a year, and hire 60,000 teachers. Hollande’s strong domestic mandate will let him push back in global economic talks against the budget cuts being demanded by Germany, which Greece and other indebted countries say are driving them deeper into the financial abyss by suffocating growth.
France’s election Sunday also gave the far right National Front a toehold in parliament, a small but symbolic victory for a party that wants to stop immigration, dump the euro currency and decries the so-called “Islamization” of France. The conservative UMP party of former President Nicolas Sarkozy, which dominated the outgoing parliament, suffered the biggest losses.
The balloting to elect 577 lawmakers for France’s lower - and more powerful - house of parliament came on the same day that conservatives won a parliamentary election in Greece.
With final results still coming in, pollsters estimated France’s Socialists and their closest allies will hold between 313 and 315 seats, well over the 289 needed for a majority and exempting them from horse-trading with far-leftists who oppose some of Hollande’s pro-European policies.
“This score exemplifies strong confidence in the president,” said Finance Minister Pierre Moscovici, who won his own race for an Assembly seat. “This gives a spinal column to the government and strengthens it ... our commitments will be honored. We will not do any austerity.”
Sarkozy’s UMP party went from 304 seats in the old Assembly to an estimated 214 in the new one, after Sarkozy himself lost his re-election bid to Hollande just six weeks ago.
Hollande now has a free hand to push forward with his plans. He wants to crack down on tax shelters and encourage companies to reinvest their profits. Also on tap is requiring banks to split their traditional deposit-and-loan activities from their speculative bets in the financial markets.
Hollande’s government has already made good on a controversial plan to lower the retirement age for some French workers to 60 from 62. He also slashed the salaries of government ministers by 30 percent - a nod to a public wary of the much-criticized bling of Sarkozy’s reign.
Hollande’s pro-growth attitude is also attracting attention elsewhere in Europe. France is the eurozone’s second-biggest economy and, along with powerhouse Germany, has a major role in EU policy and providing bailouts to weaker countries.
Hollande presented other European leaders last week with a new “growth pact” including €120 billion ($151 billion) worth of measures around the continent to stimulate growth, the Journal du Dimanche newspaper reported. A French official confirmed the report but would not provide details.
The French-German tandem has come under strain in recent months, not least because Chancellor Angela Merkel has opposed Hollande’s vocal push for government stimulus and is defending an austerity package that she worked out with Sarkozy, a fellow conservative.
Even against the recent throw-the-bums-out mindset in many parts of Europe, the turnaround for France’s Socialists was remarkable. The party was riven for much of the past decade by personal infighting and ideological discord.
On Sunday, the Socialists gained more than 100 seats in the Assembly - nearly all from the conservatives, discredited in the eyes of many voters after years of economic difficulties and high joblessness. Last fall, the Socialists seized control of the upper house of parliament, the Senate.
No matter who is in charge, there’s plenty of challenges ahead.
France’s debts are huge and its unemployment rate recently rose to 10 percent - the highest rate in 13 years. The little-known ratings agency Egan-Jones Ratings downgraded French state debt to BBB+ from A- on Thursday, warning that French banks may soon come under strain.
“The work before us is immense. Nothing will be easy,” Socialist Prime Minister Jean-Marc Ayrault said, acknowledging that France’s financial situation is “difficult.”
The anti-immigration National Front party won two seats in Sunday’s election - the most it has had since 1988, when the political system was more favorable to extremist candidates. Party leader Marine Le Pen lost her quest for a seat in the industrial north by just 118 votes, but her 22-year-old niece - Marion Marechal-Le Pen - won her race in the southeast and will become France’s youngest lawmaker.
Marine Le Pen has revamped the party to try to shed its reputation as racist and anti-Semitic. She placed third in the presidential race. The party, known for its sharp-tongued critics, will get a high-profile platform from which to grill Hollande’s ministers during weekly question time in the often-boisterous Assembly.
“This is a first step toward future elections,” Marechal-Le Pen told BFM-TV.
In an election subplot, prominent Socialist Segolene Royal - the mother of Hollande’s four children and the runner-up to Sarkozy in the 2007 presidential vote - lost her race in western France and her bid to become Parliament speaker. Her rival was a breakaway Socialist who had drawn the support of Hollande’s current companion, journalist Valerie Trierweiler.
Sunday’s result also exposed voter fatigue, coming so soon after Hollande’s own victory on May 6. The turnout of 56 percent was the lowest recorded in modern France.
In a well-off area of central Paris, voter Eve Baume said she cast her ballot for the local socialist “because I’ve been waiting for change for a long time.”
“I wanted to support Francois Hollande, the government and its projects,” she said.
Pascal Albe, a voter from the working-class Paris suburb of Ivry-sur-Seine, said he generally votes for the right but he thought Hollande should have a Socialist-led parliament.
“Otherwise the country will be paralyzed, and especially now, we don’t need that,” he said.
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