Analysis

François Hollande after six months

16 Nov 2012
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Region: 
EU/Eurozone

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  • This week marks six months in the French Presidency for François Hollande. Despite a strong Presidential election victory and socialist strength at all levels of French government, Hollande’s popularity ratings are now lukewarm, with approval levels hovering around 40% of French voters.
  • Hollande has delivered much of what his leftwing electoral coalition asked for, but with some huge and symbolic exceptions. He has cast himself as a fiscal pragmatist, but continued to irritate French business, with who he has yet to rebuild many of the bridges burnt during his election campaign.
  • Hollande passed the European Fiscal Compact after pledging to rip it up, raised VAT after pledging not to, passed the toughest budget for thirty years but funded it largely with taxes on corporates and high earners. This is a record almost guaranteed to please nobody entirely.
  • Hollande’s attempts to define a French version of ‘progressive austerity’ still appear to many – not least Berlin – to be dodging any real confrontation with the French public on the need for structural reform. The market has been patient with Paris. It may not stay that way.  
  • But Hollande has also faced arguably the most difficult prospect for a French President in Europe for decades. He is being drawn by events and by Berlin into an evolution of the Eurozone with which Paris and the French public are deeply uncomfortable. Like Sarkozy before him, his ability to resist or shape this process is constrained by France’s own relative weakness. The net result is a Franco-German relationship that is tenser than it has been for many years. 

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