May 5, 2012
Much of Europe has returned to recession. The eurozone crisis is out of control again. Unemployment is rising almost everywhere. People across all segments of the societies in the Eurozone are anxious about their status, living conditions, income or job prospects – often all at once.
France's massive challenges are a debt to GDP of about 90 per cent, a worsening trade deficit and an unsustainable public spending ratio. France's public debt is so high that interest repayments alone account for the second highest state expenditure after education. The neo-liberal agenda is the contradictory constellation of restoring competitiveness, job creation and fiscal retrenchment.
Behind this is the conflict between the dynamics of the global economy and the struggle of national politicians to control and temper it. François Hollande's central message is that the global financial markets must be determinedly reined in for the primacy of politics to return. Can a nation-state achieve this? Is it possible? Or can it only be done from within the eurozone?
François Hollande becomes France's first leftwing president since Mitterrand. He was the candidate who promised to avoid the all-austerity programme Sarkozy had committed himself to, committed to altering the French tax system, by dismantling tax breaks for the rich and pushing up taxes for the wealthy. He is also committed to renegotiating the European budgetary pact to include a growth component.
Hollande faces an economic crisis. The country is burdened with a spiralling public debt, where unemployment is at a record high (10%) , growth is stuttering, industry is in decline, competitiveness is low, there is a gaping hole in social security coffers and unions fear a swath of factory lay-offs after a lull during the campaign.