Election 2012: Candidates Hold TV Debate As Socialists Head for Victory in France
An impassioned and sometimes bad-tempered television debate, watched by almost 18 million people yesterday (2 May), is unlikely to have a significant impact on the French presidential election on Sunday (6 May), with Socialist Party (PS) candidate François Hollande set to win.
IHS Global Insight Perspective
Yesterday's (2 May) marathon televised debate, lasting almost three hours, was French president Nicolas Sarkozy's best opportunity to turn the tide of public opinion in his favour ahead of Sunday's (6 May) ballot.
With no clear winner, the debate is unlikely to have a significant impact on the outcome of the election.
All indicators suggest that François Hollande will succeed in becoming the first Socialist Party (PS) candidate to win a presidential election since François Mitterrand in 1988. Should he do so, Hollande will quickly have to provide more details of his plans to balance the budget by 2017 if he is to retain business and market confidence.
François Hollande (l) and Nicolas Sarkozy (r) at the start of the televised
Centre-right French president Nicolas Sarkozy and centre-left Socialist Party (PS) candidate François Hollande engaged in a live televised debate for almost three hours last night (2 May), watched by almost 18 million viewers. The impassioned, sometimes bad-tempered debate was Sarkozy's last chance to attempt to turn the tide of public opinion, which has favoured Hollande since his nomination in October 2011. The two candidates engaged in a wide-ranging and detailed discussion, with much of the debate focusing on the economy. Hollande was keen to place responsibility for the economic problems of the last four years on Sarkozy's shoulders, while the incumbent lost no opportunity to label Hollande's plans as reckless, dishonest, and fiscally irresponsible. The two candidates regularly disputed each other's facts and figures, and mutual accusations of dishonesty and even slander were voiced.
Neither candidate emerged as a clear winner of the debate, an outcome that favours Hollande, given his significant lead in the polls. Nevertheless, even if Sarkozy had performed more convincingly against his rival, it was always unlikely that the debate would significantly alter the electoral outcome. Historically, even in much tighter races, the debate between the two run-off candidates has failed to move opinion polls by more than a few tenths of a per cent. Not least, this is because the debate is held so close to the day of the ballot, when most voters have already made up their minds.
Hollande Heading for the Presidency
Hollande looks almost certain to win the election on Sunday (6 May), with recent polls forecasting a 6–8% margin of victory for the former PS chairman. Sarkozy looks set to become the latest European leader to lose office after presiding over the financial turmoil, recession, and Eurozone crisis unleashed in 2008. Not only has the president had to contend with a dismal economic picture, with unemployment and debt at their highest levels in years, but he has also had to struggle to overcome his personal unpopularity with much of the electorate. Upon taking office in 2007, Sarkozy quickly gained a reputation for being a friend of the rich and enthralled with wealth, at the expense of the majority of the population. He passed legislation capping the tax burden of the wealthy, hiked his own pay, and married former supermodel Carla Bruni in 2008. His attempts to shed this image in recent years have met with little success.
If Sarkozy is to pull off a miraculous victory on Sunday, he will require the support of around 80% of voters who backed far-right National Front (FN) candidate Marine Le Pen in the first round on 22 April, and more than half of the centrist voters of François Bayrou. This is extremely unlikely. Le Pen is fiercely critical of Sarkozy and has signalled her own intention to abstain in the second round. Polls suggest that although many of her voters will back Sarkozy in the second round, many will also abstain, or even vote for Hollande. Furthermore, the more Sarkozy appeals to the right, the more he risks alienating the centre, leaving Hollande to move in and appeal to this section of the electorate. With far-left candidate Jean-Luc Mélenchon backing Hollande, the PS candidate also has more room to appeal to the centre ground than if he was faced with a fractured left.
Much of the election campaign has been dedicated—unsurprisingly, given the global context—to the economy. Sarkozy has pledged to balance the budget by 2016, raising value-added tax (VAT) from 19.6% to 21.2% in order to finance a reduction in the social cost of employing workers. Other policies from Sarkozy include ending tax exemptions for companies that relocate factories outside the EU; taxing French citizens abroad; ending "golden parachutes"; and continuing his current policy of replacing just one in two retiring public-sector workers (see France: 30 January 2012: French President Unveils Tax Plans amid Raft of Policy Proposals). He has also pledged a "golden rule" committing France to balanced budgets in the future, and reducing the number of MPs. Elsewhere, Sarkozy has attempted to appeal to the far right by making a series of promises on immigration. These include halving the number of legal immigrants and making it much tougher for family members to join immigrants already in France.
Hollande has also promised to balance the budget, although not until 2017. He has promised a new 75% tax rate for those with annual income of over EUR1 million (USD1.3 million); a 15% increase in taxes on bank profits; a rise in corporate tax for large firms, raising EUR29 billion through cutting tax loopholes for the wealthy; and raising taxes on income over EUR150,000 by 4%. A key part of Hollande's platform is a pledge to introduce greater emphasis on growth at the EU level (see France – Europe: 26 April 2012: Election 2012: French Presidential Favourite Elaborates on Plans for EU Growth Measures). Hollande has also unveiled a number of plans to boost employment and job creation, including a promise to create 60,000 new jobs in education and 150,000 new opportunities for young jobseekers (see France: 27 January 2012: Election 2012: French Presidential Favourite Unveils Campaign Manifesto). In sharp contrast to Sarkozy, Hollande has also pledged to begin to reduce French dependence on nuclear power by 25% by 2025.
Neither candidate, however, has been completely clear on the public expenditure cuts they would make to complement their proposed tax increases and expenditure. This is doubtless a political decision as there are few votes to be won by promising spending cuts. However, significant spending reductions are likely to be necessary if the candidates' deficit-reduction targets are to be met.
Outlook and Implications
Barring a spectacular Sarkozy comeback, François Hollande looks set to be the next French president. Despite media hyperbole, this is likely to see only a moderate shift in policy, towards a greater tax burden on big business and the wealthy, a moderately lighter tax burden on the poorer in society, and more direct job-creation measures. Should Hollande win, he will have to be careful to elaborate more clearly on how he intends to undertake his spending plans while balancing the budget by 2017, particularly if he is to retain business and market confidence.
At the EU level, a victory for Hollande is likely to strengthen calls for a greater emphasis on growth, in addition to the central focus on austerity that has dominated in recent times. Hollande's earlier promises to renegotiate the EU fiscal compact agreed by 25 European leaders in January appear unlikely to be realised, given the political capital expended on agreeing the compact in the first instance (see Europe: 31 January 2012: EU Member States Agree on Fiscal Treaty; UK and Czech Republic Refuse to Sign). Rather more likely is the negotiation of a "growth pact" of some sort, outlining plans to increase investment across the EU, and perhaps the introduction of some form of "infrastructure bonds". Franco-German co-operation, so central to the smooth functioning of the EU, is unlikely to be unduly damaged by an Hollande presidency, despite his seemingly divergent views to those of German chancellor Angela Merkel. Campaign rhetoric aside, Hollande is a pro-European and pragmatic leader, and is likely to work towards compromise with Merkel on key EU and Eurozone issues.
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