Skip to main content

What Hollande's victory means for Europe's economy

By Justin Vaïsse, Special to CNN
updated 10:23 AM EDT, Tue May 15, 2012
François Hollande, the newly elected president of France, has many challenges ahead.
François Hollande, the newly elected president of France, has many challenges ahead.
STORY HIGHLIGHTS
  • Justin Vaïsse: French president Francois Hollande avoided making big promises
  • France's debt is near 90% of GDP, and the 2011 deficit was 5.2%, says Vaïsse
  • Hollande has to be fiscally responsible yet restore France's competitiveness, Vaïsse says
  • Vaïsse: Europe must find a way to stimulate the economy without deepening the deficit

Editor's note: Justin Vaïsse is a senior fellow at the Brookings Institution and the director of research of its Center on the United States and Europe. A specialist of American history and European politics, he has written several analyses of the French elections.

(CNN) -- François Hollande did not thank his opponent, Nicolas Sarkozy, during his acceptance speech, after defeating the incumbent with 51.6% of the vote in the French presidential runoff. But he should have, as he ran an anti-Sarkozy campaign, promising to behave like a "normal president" in contrast to the impulsive, unpredictable and sometimes ostentatious Sarkozy. And it worked: Fifty-five percent of the voters who cast a ballot for him did it to defeat Sarkozy rather than to elect Hollande.

This victory comes after an odd campaign on both sides. Sarkozy started off courting the center by emphasizing his record of reforms and his role in solving the eurozone crisis with German Chancellor Angela Merkel. But in March, he decided to take a page from his own 2007 campaign and raid the extreme-right electorate of Marine Le Pen instead. He emphasized themes like immigration, Islam and the necessity for a more protective, even protectionist, Europe. This time, however, the strategy backfired. Le Pen got a historic score in the first round, while Sarkozy sowed confusion in his own camp -- and lost.

Justin Vaïsse
Justin Vaïsse

Hollande, betting on the anti-Sarkozy mood, refrained from making big promises, and even his signature reforms had a lot of fine print. For example, he announced that he would recruit 60,000 more teachers -- but by shifting existing civil service jobs from other ministries to education. He promised to roll back Sarkozy's pension reform -- but for only a tiny fraction of workers. He pledged to renegotiate the European Fiscal Compact Treaty that Sarkozy negotiated with Merkel -- but only to add a growth stimulus, not to alter the new disciplines it imposes.

His prudence is easy enough to explain: French debt is close to 90% of GDP, the 2011 deficit was 5.2%, and Hollande has promised to rein it in to 3% in 2013 and zero in 2017 (Sarkozy was promising 2016). He will be closely monitored by the bond markets and the rating agencies, one of which stripped France of its triple-A in January.

Hollande sworn in as French president
Building through austerity in France

That is precisely one of the three big challenges Hollande will face -- to convince markets he can chart a fiscally responsible course and restore the competitiveness of France's economy while its southern neighbors are reforming fast and Germany is already very competitive. This in turn partly depends on a second challenge he faces, fashioning a new Franco-German, and then pan-European, consensus on the eurozone crisis.

Merkel was furious when Hollande announced in December that if elected, he will renegotiate the Fiscal Compact Treaty. She went as far as to refuse to receive him in Berlin, as is traditional for French presidential candidates, and to announce that she would campaign for Sarkozy -- which in the end she didn't, given Sarkozy's own U-turn on Europe.

But in recent weeks, the landscape has changed profoundly. Twelve European countries are now in recession, and the leaders of Italy and Spain have asked for balancing fiscal consolidation with growth measures, lest their drastic reforms be altogether rejected by populations suffering from austerity measures. This new "growth consensus" even includes Mario Draghi, president of the European Central Bank, who insists, however, on structural reforms rather than a stimulus with public money.

Follow @CNNOpinion on Twitter and Facebook.com/cnnopinion.

For the difficult question facing European leaders is how to stimulate the economy without deepening the deficit. Hollande has put forward suggestions (pumping up the European Investment Bank, reallocating structural funds, issuing eurobonds for infrastructure projects, creating a financial transactions tax), and there is room for a compromise with Merkel, who cannot afford to be isolated. This could take the form of an additional protocol to the Fiscal Compact to make it more acceptable, including to the German opposition Social Democratic Party, whose votes are needed for ratification.

For Hollande, this negotiation will be particularly difficult during his first month in office, because he will face a third challenge -- to win the legislative elections June 10 and 17. If he loses, the resulting situation of cohabitation (divided government) would be a disaster for France and the eurozone, as Paris would be largely paralyzed. This is why Hollande will be very careful not to antagonize French voters before the crucial votes. Fortunately for him, the pressure from the extreme left, which had a disappointing showing in the first round, is low.

In the longer term, especially after the September 2013 German elections, much will depend on Hollande's vision for France and Europe.

An interesting hint of what's in store might come from a man named Jacques Delors. In 1983, as minister of economy and finance, Delors successfully lobbied socialist President François Mitterrand to stay in the European Monetary System at the price of steep austerity. And between 1985 and 1995, as president of the European Commission, he became one of the founding fathers of the European Union, introducing the single market.

One of his protégés was none other than François Hollande.

The opinions expressed in this commentary are solely those of Justin Vaïsse.

ADVERTISEMENT
Part of complete coverage on
updated 12:24 PM EDT, Sat September 20, 2014
John Sutter boarded a leaky oyster boat in Connecticut with a captain who can't swim as he set off to get world leaders to act on climate change
updated 7:22 PM EDT, Fri September 19, 2014
Is ballet dying? CNN spoke with Isabella Boylston, a principal dancer at the American Ballet Theatre, about the future of the art form.
updated 5:47 PM EDT, Fri September 19, 2014
Sally Kohn says it's time we take climate change as seriously as we do warfare in the Middle East
updated 9:02 AM EDT, Fri September 19, 2014
Dean Obeidallah says an Oklahoma state representative's hateful remarks were rightfully condemned by religious leaders..
updated 3:22 PM EDT, Fri September 19, 2014
No matter how much planning has gone into U.S. military plans to counter the Islamic State in Iraq and Syria, the Arab public isn't convinced that anything will change, says Geneive Abdo
updated 11:44 AM EDT, Fri September 19, 2014
President Obama's strategy for destroying ISIS seems to depend on a volley of air strikes. That won't be enough, says Haider Mullick.
updated 9:03 AM EDT, Fri September 19, 2014
Paul Begala says Hillary Clinton has plenty of good reasons not to jump into the 2016 race now
updated 11:01 AM EDT, Fri September 19, 2014
Scotland decided to trust its 16-year-olds to vote in the biggest question in its history. Americans, in contrast, don't even trust theirs to help pick the county sheriff. Who's right?
updated 9:57 PM EDT, Thu September 18, 2014
Ruben Navarrette says spanking is an acceptable form of disciplining a child, as long as you follow the rules.
updated 11:47 AM EDT, Fri September 19, 2014
Frida Ghitis says the foiled Australian plot shows ISIS is working diligently to taunt the U.S. and its allies.
updated 3:58 PM EDT, Fri September 19, 2014
Young U.S. voters by and large just do not see the midterm elections offering legitimate choices because, in their eyes, Congress has proven to be largely ineffectual, and worse uncaring, argues John Della Volpe
updated 9:58 PM EDT, Thu September 18, 2014
Steven Holmes says spanking, a practice that is ingrained in our culture, accomplishes nothing positive and causes harm.
updated 2:31 PM EDT, Thu September 18, 2014
Sally Kohn says America tried "Cowboy Adventurism" as a foreign policy strategy; it failed. So why try it again?
updated 10:27 AM EDT, Thu September 18, 2014
Van Jones says the video of John Crawford III, who was shot by a police officer in Walmart, should be released.
updated 10:48 AM EDT, Thu September 18, 2014
NASA will need to embrace new entrants and promote a lot more competition in future, argues Newt Gingrich.
updated 7:15 PM EDT, Tue September 16, 2014
If U.S. wants to see real change in Iraq and Syria, it will have to empower moderate forces, says Fouad Siniora.
updated 8:34 PM EDT, Wed September 17, 2014
Mark O'Mara says there are basic rules to follow when interacting with law enforcement: respect their authority.
updated 9:05 AM EDT, Tue September 16, 2014
LZ Granderson says Congress has rebuked the NFL on domestic violence issue, but why not a federal judge?
updated 7:49 AM EDT, Tue September 16, 2014
Mel Robbins says the only person you can legally hit in the United States is a child. That's wrong.
updated 1:23 PM EDT, Mon September 15, 2014
Eric Liu says seeing many friends fight so hard for same-sex marriage rights made him appreciate marriage.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT