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 9:29 AM EDT, Mon October 20, 2014
Cornell Belcher says the story of the "tea party wave" in 2010 was bogus; it was an election determined by ebbing Democratic turnout
updated 4:12 PM EDT, Mon October 20, 2014
Les Abend says pilots want protocols, preparation and checklists for all contingencies; at the moment, controlling a deadly disease is out of their comfort zone
updated 11:36 PM EDT, Sun October 19, 2014
David Weinberger says an online controversy that snowballed from a misogynist attack by gamers into a culture war is a preview of the way news is handled in a world of hashtag-fueled scandal
updated 8:23 AM EDT, Mon October 20, 2014
Julian Zelizer says Paul Krugman makes some good points in his defense of President Obama but is premature in calling him one of the most successful presidents.
updated 10:21 PM EDT, Sun October 19, 2014
Conservatives can't bash and slash government and then suddenly act surprised if government isn't there when we need it, writes Sally Kohn
updated 8:28 AM EDT, Mon October 20, 2014
ISIS is looking to take over a good chunk of the Middle East -- if not the entire Muslim world, write Peter Bergen and Emily Schneider.
updated 9:00 AM EDT, Mon October 20, 2014
The world's response to Ebola is its own sort of tragedy, writes John Sutter
updated 4:33 PM EDT, Fri October 17, 2014
Hidden away in Russian orphanages are thousands of children with disabilities who aren't orphans, whose harmful treatment has long been hidden from public view, writes Andrea Mazzarino
updated 1:22 PM EDT, Sat October 18, 2014
When you hear "trick or treat" this year, think "nudge," writes John Bare
updated 12:42 AM EDT, Sat October 18, 2014
The more than 200 kidnapped Nigerian schoolgirls have become pawns in a larger drama, writes Richard Joseph.
updated 9:45 AM EDT, Fri October 17, 2014
Peggy Drexler said Amal Alamuddin was accused of buying into the patriarchy when she changed her name to Clooney. But that was her choice.
updated 4:43 PM EDT, Thu October 16, 2014
Ford Vox says the CDC's Thomas Frieden is a good man with a stellar resume who has shown he lacks the unique talents and vision needed to confront the Ebola crisis
updated 4:58 AM EDT, Sat October 18, 2014
How can such a numerically small force as ISIS take control of vast swathes of Syria and Iraq?
updated 9:42 AM EDT, Fri October 17, 2014
How big a threat do foreign fighters in Syria and Iraq pose to the West? It's a question that has been much on the mind of policymakers and commentators.
updated 8:21 AM EDT, Fri October 17, 2014
More than a quarter-million American women served honorably in the Iraq and Afghanistan wars. Now they are home, we have an obligation to help them transition back to civilian life.
updated 4:27 PM EDT, Thu October 16, 2014
Paul Begala says Rick Scott's deeply weird refusal to begin a debate because rival Charlie Crist had a fan under his podium spells disaster for the Florida governor--delighting Crist
updated 12:07 AM EDT, Thu October 16, 2014
The longer we wait to engage on Ebola, the more limited our options will become, says Marco Rubio.
updated 7:53 AM EDT, Wed October 15, 2014
Democratic candidates who run from President Obama in red states where he is unpopular are making a big mistake, says Donna Brazile
updated 12:29 AM EDT, Thu October 16, 2014
At some 7 billion people, the world can sometimes seem like a crowded place. But if the latest estimates are to be believed, then in less than a century it is going to feel even more so -- about 50% more crowded, says Evan Fraser
updated 12:53 PM EDT, Mon October 20, 2014
Paul Callan says the Ebola situation is pointing up the need for better leadership
updated 6:45 PM EDT, Wed October 15, 2014
Nurses are the unsung heroes of the Ebola outbreak. Yet, there are troubling signs we're failing them, says John Sutter
updated 1:00 PM EDT, Wed October 15, 2014
Dean Obeidallah says it's a mistake to give up a business name you've invested energy in, just because of a new terrorist group
updated 7:01 PM EDT, Wed October 15, 2014
Fear of Ebola is contagious, writes Mel Robbins; but it's time to put the disease in perspective
updated 1:44 PM EDT, Tue October 14, 2014
Oliver Kershaw says that if Big Tobacco is given monopoly of e-cigarette products, public health will suffer.
updated 9:35 AM EDT, Sat October 18, 2014
Stop thinking your job will make you happy.
updated 10:08 PM EDT, Tue October 14, 2014
Ruben Navarrette says it's time to deal with another scandal involving the Secret Service — one that leads directly into the White House.
updated 7:25 AM EDT, Tue October 14, 2014
Americans who choose to fight for militant groups or support them are young and likely to be active in jihadist social media, says Peter Bergen
updated 9:03 AM EDT, Mon October 13, 2014
Stephanie Coontz says 11 years ago only one state allowed same sex marriage. Soon, some 60% of Americans will live where gays can marry. How did attitudes change so quickly?
updated 4:04 PM EDT, Tue October 14, 2014
Legalizing assisted suicide seems acceptable when focusing on individuals. But such laws would put many at risk of immense harm, writes Marilyn Golden.
updated 9:07 AM EDT, Mon October 13, 2014
Julian Zelizer says the issues are huge, but both parties are wrestling with problems that alienate voters
updated 6:50 PM EDT, Mon October 13, 2014
Mel Robbins says the town's school chief was right to cancel the season, but that's just the beginning of what needs to be done
updated 11:43 AM EDT, Sat October 11, 2014
He didn't discover that the world was round, David Perry writes. So what did he do?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT