Debt crisis test for Hollande

Updated: 2012-05-09 08:06

By Chen Yugang (China Daily)

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After two rounds of voting in France, the socialist candidate Francois Hollande was voted in as president.

Many surveys and analysts had already forecast that Hollande would win, because after the first round of voting Nicolas Sarkozy had lost much of his support and was losing still more. Marine Le Pen, like Sarkozy a rightwing candidate, called for her supporters to cast a blank vote, while leftist leaders publicly announced their support for Hollande. Perhaps most importantly, Francois Bayrou, the centrist candidate, who won 9.13 percent of the support in the first round of the election, gave his backing to Hollande. He was the first centrist politician in France to back the left.

There are many reasons why Sarkozy was so unpopular. But the main one was his incompetence in coping with the European debt crisis. Some media outlets are already referring to Sarkozy as the 11th European leader to be laid off by the debt crisis.

The crisis has dealt a blow to Greece, Italy and the Netherlands. Some observers attribute the success of right-wing parties in recent European elections to voters' perception that they are better at crisis management. Germany, which advocates harsh austerity measures has tried to persuade Europeans to believe that Hollande will make France more gloomy and deteriorate the debt crisis.

However, is Germany's prescription the only choice?

Let's look at what Sarkozy and the European leaders did to combat crisis: When the financial crisis broke out in the United States, Europe had no stimulus plans; it said it did not need one due to its comprehensive welfare system. But the welfare system of which it was so proud soon dragged it into the crisis.

To make it worse, when the economy was no longer able to hold on, and the European governments were on the brink of bankruptcy, they cut deficits instead of stimulating their economies.

As many analysts have pointed out, cutting deficits is less favorable to those countries in crisis than it is to Germany as the helper. But Sarkozy linked himself with the plan, people even called it the "Merkozy" plan, in exchange for Germany's support for his foreign policy.

Opposition to the "Merkozy" plan had always been suppressed in the media due to the influence of its supporters; but people's dissatisfaction and doubts could never be eliminated. The election brought this to the surface and it became one of the most important cards Hollande played against Sarkozy.

The central principles of Hollande's plan are economic growth and renegotiation of the European financial agreement. No one knows, for sure, whether his plan will prove effective, but at least people are paying attention to it, the voting rate was among the highest in France for decades.

Hollande's victory has proved that people want to try the new plan after living under Sarkozy's austerity plan for years without seeing any end to it.

His victory will certainly have an influence on the future of European politics. First of all, his being elected has already reversed the trend of universal defeat for the left on the European continent; second, he might propel renegotiation of EU financial agreements.

The financial agreements have two requirements: EU countries should unite more intimately, and pursue financial budget balancing. The first is in accordance with European unification, so all Hollande needs is to propel the second, and concentrate on promoting economic growth. That's also the general trend of Europe, as Spanish media outlets recently revealed the EU is considering a huge economic growth plan.

Of course, the debt crisis is not the only reason for people choosing Hollande instead of Sarkozy. During his years in office, Sarkozy made both gains and losses in his diplomacy. He successfully mediated the conflict between Russian and Georgia, and took the lead in intervening in Libya. But he damaged Sino-European relations by meeting the Dalai Lama and threatening to boycott the opening ceremony of the Beijing 2008 Olympic Games.

On May 15, Hollande will be sworn in as the new president of France. The first test of his presidency, coping with the European debt crisis, will also begin then and the world will be keeping a close eye on Europe to see what happens.

The author is a professor of European studies at Fudan university.