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France’s Hollande vows to reverse austerity

Economy

Mark Deen and Helene Fouquet Paris

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Francois Hollande, Socialist Party candidate for the 2012 French presidential election, delivers his speech to supporters in Tulle after early results in the first round vote of the 2012 French presidential election April 22, 2012. REUTERS/Jacky Naegelen (FRANCE - Tags: POLITICS ELECTIONS)

French Socialist presidential candidate François Hollande’s campaign pledge to reverse Europe’s austerity drive has met German resistance, pointing to tension between the euro zone’s two biggest economies.

Hollande, who polls show will oust incumbent Nicolas Sarkozy in France’s election on May 6, said on Monday that the absence of economic growth prospects explained the record score for anti-euro National Front leader Marine Le Pen in the April 22 first round.

Le Pen, the leader of the nationalist, anti-immigrant party, won 17.9 percent, or 6.4 million votes, surpassing poll estimates with the highest tally for the National Front created by her father Jean-Marie Le Pen in 1972. Hollande got 28.6 percent and Sarkozy 27.2 percent.

“It’s this austerity everywhere that brings desperation to people and leads them to vote for the far right,” Hollande said on Monday in a speech in Quimper, in Brittany, where the National Front almost doubled its score from 2007.

Hollande repeated his criticism of the German-advocated austerity and said the European Central Bank needed to do more to support Europe’s growth, comments that may put him at odds with France’s neighbour and Europe’s biggest economy. He said he would seek to add growth and investment measures to the fiscal treaty signed by its European partners.

“We’re not saying that saving solves all problems,” German Chancellor Angela Merkel said at a conference in Berlin yesterday. Still, “you can’t spend more than you take in. You can’t live your whole life this way. Everybody knows this.”

German Foreign Minister Guido Westerwelle said that the fiscal pact was a done deal and would not be renegotiated to reflect election results. Peter Altmaier, the chief whip of Germany’s ruling coalition, said yesterday that he expected the budget pact to be implemented whoever won the presidential election in France.

“If Mr Hollande were to say that he wants to increase government spending and save less, he’ll lose the confidence of the financial markets,” Altmaier said in Berlin.

“We will stick to our fundamental principles because there’s really no alternative.”

Europe’s front against austerity has expanded in recent weeks after Spain struggled to meet EU-imposed deficit targets, election campaigns in Greece faced anti-austerity rumblings and a revolt against extra spending cuts in the traditionally budget-conscious Netherlands propelled Prime Minister Mark Rutte’s coalition toward an early breakup.

Views that are critical of austerity have boosted anti-European sentiments that play into themes at the core of Le Pen’s campaign. Le Pen, a member of the European Parliament, focused a large part of her campaigning against the EU, calling for France to exit the euro. She has repeatedly criticised the close relations between Sarkozy and Merkel.

Le Pen’s voters “are the workers, the unemployed, those without a diploma, the losers of globalisation”, said Sylvain Crépon, a professor in sociology at the University of Paris Nanterre. “Le Pen gave them recognition more than solutions.”

Hollande’s call for growth measures may generate fresh doubts about the German-driven plan for coming to grips with Europe’s more than three-year-old sovereign debt crisis.

Still, the imposition of fiscal discipline had not resulted in “a tidal wave of far-right, anti-European, xenophobic parties”, Thomas Klau, a senior policy fellow at the European Council on Foreign Relations, said. “Voters haven’t returned extreme parties to the government.”

The euro zone debt crisis has resulted in the ouster of leaders in Ireland, Portugal, Greece, Italy, Spain, Slovenia, Slovakia and Finland.

The European Commission “often calls on the region’s leaders not to give in to the temptation of populist speeches and to continue to move on with a Europe of peace and growth”, Olivier Bailly, a spokesman for commission president José Manuel Barroso, had said, AFP reported. The remarks echoed concerns across Europe after Le Pen’s record-high vote.

“A Europe that doesn’t defend its citizens is finished, a Europe that doesn’t defend its borders is finished, a Europe that opens its markets without reciprocity is finished,” Sarkozy said at a campaign rally near Tours on Monday.

Hollande has criticised Sarkozy for seeking to lure Le Pen voters in the second round of polls, saying “no doubt he will use all the elements of fear” to win them over.

“This is a vote of crisis,” Sarkozy said. “Political leaders, not just in France, but around the world, must see this rise of a vote of crisis.”

Merkel, who has dominated Europe’s crisis response, said debt reduction was the best route to economic health.

“Solid budget management is a factor for producing growth, but of course not the only one,” Merkel said on Monday at the Hannover trade fair, a showcase for hi-tech products. “We’re still in the process of overcoming this crisis.”

Hollande’s support ranges from 53 percent to 56 percent, while Sarkozy’s backing is at 44 percent to 47 percent, according to recent polls conducted after first round voting ended by CSA, BVA, Ifop and Ipsos.

Hollande said, if elected, he would send a draft proposal of the changes he would like to see to the treaty to the 25 EU leaders who signed the German-inspired fiscal treaty on March 2. – Bloomberg

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