As was not entirely unexpected, President Sarkozy of France was defeated in the second round of the presidential elections, though his margin of victory was not substantial – 51.6% to 48.4%, as had been implied in the first round of the voting. Sarkozy’s fate was probably cast when the National Front leader, Marine Le Pen, who had gained a healthy 18% of the vote in the first round, announced that she would, in effect, spoil her vote. This was a clear signal to her followers that she deemed Mr Sarkozy to be less of a threat for the future of her party than the Socialists, and an indication to them that the National Front’s ambition from here on will be to seek to replace Sarkozy’s grouping as the representative of the right in France.
While much commentary has been suggesting that Sarkozy’s demise is a function of the unpopularity of the economic policies he put in place to deal with the economic recession in France and Europe, there seems to be a case for saying that the majority of voters have been perturbed not only by that, but also by a certain erratic aspect to his political behaviour. In addition, a few months ago, Sarkozy, like David Cameron in Britain, would probably have thought that in spite of the economic situation, the electorate would have put a favourable weighting on their much celebrated intervention in Libya. But the electorate has, in both cases, given their conclusion that charity begins at home, and that the delights of external victory are no substitute for diminishing prosperity at home.
The defeat of the incumbent in France is paralleled by the dispatch of both the moderate left and right in simultaneous elections in Greece, where the population clearly feels that the austerity packages imposed on them, as on the populations of Spain and Portugal, have been too much to bear. It is noticeable too, that this weekend, Chancellor Merkel’s Christian Democrats have also lost a parliamentary election in one state of the Federal Republic with doubtful chances in another state election to be held next week.
In that context, these electoral events are likely to give further support to opponents of the Franco-German policy, virtually imposed on other European Union states, of seeking to restore fiscal balance through severe reduction of public expenditure, with the result of what they claim to be a short-term period of austerity. Francois Hollande’s policy was diametrically opposite to this, as he argued that while there has to be a regaining of fiscal balance, it is important to simultaneously introduce these measures in a manner that will not inhibit economic growth. But the supporters of austerity, whether in France or Britain, argue that there is in fact a sequencing of economic policy in which the restoration of fiscal balance necessarily precedes the resumption of economic growth.
So on the face of it, it seems that there will be a continuing battle of wits within the European Union on the proper approach to economic policymaking at this time, in much the same way as in the United States presently, there is a difference of opinion of a relatively similar nature between the Republicans and President Obama, that is certainly likely to influence the outcome of the elections due next year in that country. In addition, Mr Hollande, as representative of the side of socialism in France, has also been insisting that if there is to be some degree of austerity, the rich must be induced, or made, to accept some responsibilities. So in that regard, he has also campaigned on a policy of raising taxes on corporations, and introducing a tax rate of 75% on incomes over 1 million euros, in order to bring the national budget into balance.
Chancellor Merkel, as would be the proper thing to do, has welcomed Mr Hollande to the presidency of France, and has pledged to work with him. But she has also insisted that her advocacy of her country’s policy in regard to the situation in the depressed countries in the EU will not change, and that the fiscal pact negotiated recently for them at the level of the EU is “not negotiable.”
But both new President Hollande of France and Chancellor Merkel of Germany will be well aware that the success of the EU in concluding reforms over the years, has always tended to depend on a substantial degree of policy harmony between these two giants of the integration system. Nothing has changed in that regard. And Hollande, even in the enthusiasm of victory will be well aware that the narrowness of his victory does not suggest a policy of placing excessive pressure on any of the social sectors of France, at a time when a right wing formation, the National Front, will be seeking to consolidate itself with policies that in general have been anathema to both the centre and the socialist sections of the population.
In international policy it is unlikely that from the perspective of the NATO alliance, there will be any major deviations from the Sarkozy policy on issues relating to the Middle East and Iran, or on events on the African continent. Hollande is likely to be more sympathetic than Sarkozy to President Obama’s view of seeking to induce growth at this time in the economies of the G8, which meets in the United States over the next fortnight. And it is likely that he will carry much of the Sarkozy view on geopolitical problems when NATO also meets subsequent to the G8 meeting.
