The recent elections in France were undoubtedly a great success for The Socialist Party. Not only did their presidential candidate Francois Hollande beat the then conservative incumbent Nicolas Sarkozy, but the party also won an absolute majority in the lower house. It is the first time in 30 years – since the Mitterrand years – that they alone have held the National Assembly.
The elections signal French citizens, like many across Europe, rejecting a fiscal agenda of austerity. They have instead drifted to the left in the hope that Hollande’s potentially more keynesian policies will be enough to instigate economic prosperity. In Hollande’s Presidential campaign he set out a 60-point programme designed to boost employment, increase the number of teaching assistants and roll back some of the pension reforms initiated by Sarkozy. There are also more radical proposals, including a 75% tax on the top income bracket and the renegotiating of the EU fiscal growth pact between Sarkozy and the German government. The question however is: will all of this work?
August 2011 saw the Sarkozy administration announce a package of austerity measures aimed at reducing the public deficit by 12bn Euros over two years. In November it announced a further 7bn Euros of cuts in 2012 and 11.6bn Euros in 2013. However such proposals were not popular with French citizens and did little to save the Sarkozy Presidency. Without question, there are hard times ahead for the new government.
Despite Hollande announcing that “austerity can no longer be the only option”, rising public debt has given him little choice but to make some form of cuts in spending and scale back his plans for big investment in infrastructure projects. With public debt touching 90% of GDP, the Hollande administration has so far been rather vague about what spending cuts are required. Despite this, one can be in no doubt that some austerity measures are going to be needed for the country.
More recently, President Hollande has urged MPs to set precedence by adopting a bill which would have each deputy account for their annual allowance of 77,000 Euros. The expenses scandal across the channel evidently didn’t prove to be enough of an example and subsequently the bill was thrown out by four to one.
The Socialists may have comfortably won the elections and have overall control of the National Assembly, but they now have to satisfy the high expectations of the citizens who voted for them. Will this shift to the left be a success?
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