Bloomberg News

Hollande Tells London He’s Not Dangerous

February 29, 2012

Francois Hollande, the Socialist candidate in France’s presidential election who called finance his “greatest adversary,” tried to calm market concerns about him, saying in London that he should not be feared.

“I’m not dangerous,” Hollande said in English, in response to a reporter’s query about his stance on the finance industry as he arrived at the city’s St. Pancras station.

Hollande kicked off his campaign last month with a speech criticizing “the power of money,” pledging to ban French banks from operating offshore and cap executive pay. Opinion polls show the 57-year-old may become the first Socialist president since Francois Mitterrand, whose second term ended in 1995. Hollande would beat President Nicolas Sarkozy by 58 percent to 42 percent in the decisive second round of the ballot on May 6, according to an Ipsos poll published yesterday.

The Socialist contender has attempted to tone down his anti-markets pronouncements and in his one-day London visit is meeting French expatriates, many of whom work in the City. His efforts to appease his left-leaning base while reaching out to centrist and right-leaning voters have drawn fire from Sarkozy.

“He pretends to be Thatcher in London and Mitterrand in France,” Sarkozy said in a speech in Marseille on Feb. 19. “Where is the truth?”

The U.K. has the biggest French overseas community, with more than 250,000 French citizens, making it a key location to rally voters. Sarkozy went to London in his 2007 campaign as he sought to mobilize the group of high-earning, young expats.

New Finance

Arriving in London today, Hollande, whose campaign slogan is “Change is Now,” said he was there to “convince French people, not English people.” He was welcomed by a group of about 30 supporters, one carrying a bunch of red roses for him.

“I wanted to come to London to say that the finance industry is at the service of the economy to create wealth and not to enrich itself,” he said at a joint press conference with Labour leader Ed Miliband at the House of Commons today.

Hollande has promised to renegotiate Europe’s latest fiscal treaty, already ratified by a majority of countries, saying it puts undue emphasis on austerity and says little about the need for growth measures.

“What Francois has been talking about, the way we need to reform, the way we need to reform the financial work, the capital work is absolutely right,” Miliband said today. “I’ve been very, very encouraged by the leadership he is showing.”

‘Moderate Socialist’

In recent weeks, Hollande has sought to calm investor concern about his possible victory, pointing out that it was his party that “liberalized the economy and opened up the markets to finance and privatizations,” citing the period when Lionel Jospin was France’s prime minister between 1997 and 2002.

The Socialist leader said “there is no big fear,” adding that the period that saw President Mitterrand nationalizing banks and pumping billions into public works was over. The “1980s was a different era,” he said.

“Hollande is perceived as a moderate socialist,” David Dubois, a professor at the Paris business school HEC, said in an interview. “His declarations tend to show that he wants to be in accord with liberal principles, distancing himself from his socialist origins. While there could still be apprehension in the U.K., because of the word ‘socialist,’ Hollande will seek to show he is pragmatic and reasonable.”

Taxing Plans

Hollande is promising to balance the budget by 2017. He has pledged that there’ll be no increase in the public payroll on his watch. He has said he wants to increase levies on the rich and end tax breaks for big business. He’s also seeking tax cuts for small and mid-sized companies.

The Socialist candidate’s plans to curb the excesses of the banking industry include taxing financial transactions -- something Sarkozy has also proposed -- and forcing lenders to separate their investment-banking and retail businesses.

His latest proposal to tax the rich has come under fire. Top earners should pay 75 percent of their income above 1 million euros ($1.34 million) a year in taxes, he said Feb. 27. That’s on top of his proposal to raise the tax rate for people making 150,000 euros or more to 45 percent from 40 percent.

The most recent tax measure, that Hollande called “a matter of patriotism,” had sparked a debate in France with Sarkozy’s ruling Union for a Popular Movement Party and centrist parties saying it will lead to capital flight.

Poll Lead

Miliband today said that while he shares Hollande’s notion of a “fairer society,” he does not favor an income tax rate higher than 50 percent.

With less than two months before the first round of the elections, Sarkozy lags behind Hollande by 4.5 points in voting intentions, narrowing the gap since he declared his bid on Feb. 14. The Ipsos survey shows Sarkozy picking up support, particularly in the first leg of the two-round contest, while still trailing the leading candidate for the second ballot. The first round of the vote will be held on April 22.

Hollande, for whom the London trip is the latest stop in a European tour to reach out to left-wing allies, is not scheduled to meet with Prime Minister David Cameron. Since he won the Socialist nomination, he has visited Berlin, Rome and Madrid. He may also visit Denmark.

Hollande, who has never held a government position, was the Socialist Party’s leader from 1997 to 2008.

To contact the reporter on this story: Helene Fouquet in London via hfouquet1@bloomberg.net; Caroline Connan in London via cconnan@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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