Bloomberg News

Hollande Meets German Resistance in Anti-Austerity Push

April 24, 2012

Socialist Party candidate for the 2012 French presidential election, Francois Hollande, during a campaign meeting in Lorient, France, on April 23, 2012. Photographer: Fred Dufour/AFP/Getty Images

Socialist Party candidate for the 2012 French presidential election, Francois Hollande, during a campaign meeting in Lorient, France, on April 23, 2012. Photographer: Fred Dufour/AFP/Getty Images

French Socialist presidential candidate Francois Hollande’s campaign pledge to reverse Europe’s austerity drive met German resistance, pointing to tension between the region’s two biggest economies.

Hollande, who polls show will oust incumbent Nicolas Sarkozy in May 6 elections, yesterday said the absence of economic growth prospects explained anti-euro National Front leader Marine Le Pen’s record score in the April 22 first round.

Le Pen, the leader of the nationalist, anti-immigrant party, won 17.9 percent, or 6.4 million votes, surpassing poll estimates with the highest tally for the National Front created by her father Jean-Marie Le Pen in 1972. Hollande got 28.6 percent and Sarkozy 27.2 percent.

“Europe can’t just impose austerity,” Hollande said in an interview today on a train to Laon, in the Aisne district northeast of Paris. “Of course, we won’t depart from rigorous budget rules, but austerity in the sense that it’s only a burden or pressure is unbearable for people.”

Hollande has repeated his criticism of the German-advocated austerity and said the European Central Bank needs to do more to support Europe’s growth, comments that may put him at odds with France’s neighbor and Europe’s biggest economy. He says he’ll seek to add growth and investment measures to the fiscal treaty signed by its European partners.

“We’re not saying that saving solves all problems,” German Chancellor Angela Merkel said at a conference in Berlin today. Still, “you can’t spend more than you take in. You can’t live your whole life this way. Everybody knows this.”

Question of Confidence

German Foreign Minister Guido Westerwelle said that the fiscal pact is a done deal and won’t be renegotiated to reflect election results. Peter Altmaier, the chief whip of Germany’s ruling coalition, said today that he expects the budget pact to be implemented whoever wins the May 6 vote in France.

“If Mr. Hollande were to say that he wants to increase government spending and save less, he’ll lose the confidence of the financial markets,” Altmaier said in an interview in Berlin. “We will stick to our fundamental principles because there’s really no alternative.”

Europe’s front against austerity has expanded in recent weeks after Spain struggled to meet European Union-imposed deficit targets, election campaigns in Greece faced anti- austerity rumblings and a revolt against extra spending cuts in the traditionally budget-conscious Netherlands propelled Prime Minister Mark Rutte’s coalition toward an early breakup.

Losers of Globalization

Austerity critical views have boosted anti-European sentiments that play into themes at the core of Le Pen’s campaign. Le Pen, a member of the European Parliament, focused a large part of her campaigning against Europe, calling for France to exit the euro. She has repeatedly criticized the close relations between Sarkozy andMerkel.

Le Pen’s voters “are the workers, the unemployed, those without a diploma, the losers of globalization,” said Sylvain Crepon, a professor in sociology at the University of Paris- Nanterre. “Le Pen gave them recognition more than solutions.”

Hollande’s call for growth measures may generate fresh doubts about the German-driven strategy for coming to grips with the more than three-year-old European debt crisis.

Still, the imposition of fiscal discipline hasn’t resulted in “a tidal wave of far-right, anti-European, xenophobic parties,” Thomas Klau, a senior policy fellow at the European Council on Foreign Relations, said in an interview with Bloomberg Television in Paris. “Voters haven’t returned extreme parties to the government.”

Protective Europe

The euro-area crisis in Europe has resulted in the ouster of leaders in Ireland, Portugal, Greece, Italy, Spain, Slovenia, Slovakia and Finland.

The European Commission “often calls on the region’s leaders not to give in to the temptation of populist speeches and to continue to move on with a Europe of peace and growth,” Olivier Bailly, a spokesman for its president Jose Manuel Barroso said, Agence France-Presse reported. The remarks echoed concerns across Europe after Le Pen’s record-high vote.

“A Europe that doesn’t defend its citizens is finished, a Europe that doesn’t defend its borders is finished, a Europe that opens its markets without reciprocity is finished,” Sarkozy said at a campaign rally near Tours yesterday.

Merkel, who has dominated Europe’s crisis response, said debt reduction is the best route to economic health.

“Solid budget management is a factor for producing growth, but of course not the only one,” Merkel said yesterday at the Hanover trade fair, a showcase for high-tech products. “We’re still in the process of overcoming this crisis.”

Refocus Europe

Hollande said, if elected, he would send a draft proposal of the changes he would like to see to the treaty to the 25 EU leaders who signed the German-inspired treaty on March 2.

Hollande’s support ranges from 53 percent to 56 percent, while Sarkozy’s backing is at 44 percent to 47 percent, recent polls showed. The surveys were conducted after first round voting ended by pollster CSA, BVA, Ifop and Ipsos.

“If we win, France will refocus European construction and put growth, industry, sustainable growth (…) at the center,” said Hollande in the Brittany town of Quimper yesterday.

To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.net; Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net


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