What Hollande's Anti-Austerity Rhetoric Means

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Socialist Francois Hollande won the French presidency over the weekend, in large part due to his pledge to push for growth and battle the German-led austerity approach to Europe's fiscal problems. But what does that pledge mean in practical terms?


This is MORNING EDITION from NPR News. Good morning, I'm David Greene.


And I'm Steve Inskeep.

The newly-elected president of France will soon have to decide how to keep his campaign promises, or if he can keep them at all.

GREENE: Socialist Francois Hollande won election over the weekend, promising a society that's more fair. He criticized the painful spending cuts that Europeans are using to ward off financial disaster.

INSKEEP: But Hollande has also promised to balance France's budget, and his options may be limited, as Europe tries to ward off recession.

Here's NPR's Eleanor Beardsley.


ELEANOR BEARDSLEY, BYLINE: Watching the crowd celebrate Hollande's victory at the Bastille Sunday, it's clear the hopes for the new president are enormous after what people here describe as a disastrous five years under President Nicolas Sarkozy. Hollande supporters say Sarkozy's presidency was about injustice and inequality, where the rich got richer and the poor got poorer. Hollande said he would change that. Not just in France, but across Europe.


PRESIDENT FRANCOIS HOLLANDE: (Through translator) In all the European capitals, beyond the leaders and the heads of government, the people are looking to us. Thanks to our movement, they hope to be finished with these destructive austerity measures.

BEARDSLEY: Hollande's first foreign trip will be to Berlin. German Chancellor Angela Markel says she'll welcome him with open arms. Both have stressed the importance of the Franco-German alliance to continue leading Europe. But Merkel said there was no question of renegotiating an austerity treaty put in place with President Nicolas Sarkozy.

ANGELA MERKEL: (Through translator) We in Germany are of the opinion, and that includes myself personally, that the stability pact cannot be renegotiated. I think the pact is right.

BEARDSLEY: Thomas Klau, head of the Paris office of the European Council on Foreign Relations, says Merkel will change her mind, because growth across the continent is a lot worse than expected.

THOMAS KLAU: Angela Markel won't say no to Francois Hollande. Of course, some reorientation or rebalancing of the eurozone's joint policy framework is not only something which Francois Hollande is going to call for, but something where you're going to have the support of a lot of partisans. Berlin has read the signs and is ready to discuss a new compromise.

BEARDSLEY: Olivier Ferrand is the head of a left-leaning think tank in Paris. He says though Hollande wants growth, the new French president doesn't want to weaken the austerity aspects of the treaty because he thinks they're necessary.

OLIVIER FERRAND: He will advocate a complementary approach. Another leg for a country to walk. You need two legs and there is one which is lacking at the moment. It's the growth agenda.

BEARDSLEY: Former European Commissioner Peter Mandelson agrees. But he says Hollande is a pragmatist, not an ideologue, and he won't try to go too far.

PETER MANDELSON: You're not going to see therefore a great swing in economic policy from full-blown austerity to full-blown Keynesian stimulus. What I think you're going to see instead is a new European consensus that favors a much more nuanced policy mix to encourage growth.

BEARDSLEY: Hollande has pledged to balance the French budget by 2017. He'll do that partly by taxing the very rich at rates of 75 percent, an idea that proved wildly popular among the majority of his supporters. But to really create jobs, say analysts, Hollande has to take on serious labor market reforms, which is something he's never talked about.


BEARDSLEY: And clearly that would not sit well with many of the supporters who came out to celebrate his victory. Some are carrying signs calling for the minimum wage to be raised to the equivalent of $22 an hour. Klau says Hollande's electorate falls into several categories. The first category is realistic and knows France has to implement reforms, he says.

KLAU: Then there's another part of the electorate that probably hopes that Hollande can pull some sort of miracle and shield France from the painful reforms that countries like Italy and Spain and Germany have gone through or are going through.

BEARDSLEY: Klau says if Hollande plans to reform France, he better do it early on, so the fruits of his labor can blossom before he's up for reelection.

Eleanor Beardsley, NPR News, Paris.

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