What France's Presidential Race Means for the U.S. and the World

The coming election could help steer the Afghan war, the global economy, and the course of European integration or disintegration.

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France is preparing for a presidential vote that has potentially major consequences for the eurozone, European integration, and transatlantic relations. The two main contenders--incumbent Nicolas Sarkozy from the center-right Union for a Popular Movement and Francois Hollande of the center-left Socialist Party--are not expected to garner 50 percent of the vote on April 22, making a runoff round likely on May 6.

Opinion surveys have given Hollande a consistent edge, although the gap has been closing as the vote draws near. Many French voters are ready for a respite from Sarkozy, whom they view as having failed to improve economic conditions and as a mercurial and unpredictable leader. Unemployment stands at close to 10 percent, and growth is anemic. Earlier this year, the U.S.-based rating agency Standard and Poor's stripped France of its AAA credit rating in a wave of downgrades, signaling that European states were not taking sufficient action to address systemic problems in the eurozone.

Nonetheless, Sarkozy has of late been making a comeback; he is a talented and energetic campaigner, especially in comparison with Hollande's bland style. And, as across much of Europe, the fortunes of the right are being strengthened by fear about immigration and the socioeconomic intrusions of globalization.

In France, as in many other EU member states, there is considerably less ideological distance between the mainstream center-right and center-left parties than there is in the United States. Whereas Democrats and Republicans have become ideologically polarized since the Cold War's end, mainstream European parties have tended to converge toward the center. Partly as a consequence, smaller, more extremist parties have been faring well. In France, Marine Le Pen on the hard right and Jean-Luc Mélenchon on the far left are threatening to drain votes from both Sarkozy and Hollande.

Reassessing French Role in NATO?

Despite the ideological convergence of the main parties, the outcome of the election is likely to have a significant impact on both foreign and domestic policy. Hollande has pledged to withdraw French troops from Afghanistan by the end of 2012. (France currently has some 3,600 troops in Afghanistan.) His campaign has also hinted that he might reconsider Sarkozy's 2007 decision to rejoin NATO's integrated command structure, a move that was opposed by the Socialists.

Although Sarkozy has arguably been France's most Atlanticist and pro-American leader since World War II, he also wants to expedite the drawdown from Afghanistan, calling for a full exit of French troops by the end of 2013.

Whoever wins the election, the next French president will be pressed hard to stay in lockstep with his NATO allies and adhere to a withdrawal timetable agreed upon at the upcoming NATO summit in Chicago. And although Hollande has hinted that he might distance France from NATO, he is unlikely to undo the closer relationship with the alliance that has emerged during Sarkozy's watch.

Moreover, France's efforts to guide Europe's response to the Arab Spring and its leading role in NATO's operation in Libya have helped satisfy France's yearning for a high profile on matters of foreign policy. And with the United States downsizing its presence in Europe and pivoting to East Asia, many Europeans worry about too little American power, not too much.

Anti-EU Sentiments

When it comes to the European Union and its ongoing financial crisis, both candidates have, for tactical reasons, been tapping into growing anti-EU sentiment among the public. Sarkozy has raised the prospect of tightening borders and reevaluating existing arrangements for the free flow of people among member states. He also threatened unilateral trade barriers to combat what he sees as unfair global competition on public procurement--a "buy-European" initiative of sorts.

Meanwhile, Hollande has indicated that he intends to renegotiate the EU's new fiscal pact, insisting that the deal should include more provisions to stimulate growth. He has also called for tariffs on imports from countries that do not meet EU standards on safety, labor, and the environment.

Most of these proposals have been greeted with chagrin by many of France's EU's partners. Especially in the midst of the union's current political and economic fragility, unilateral French moves risk exacerbating the renationalization of political life that has been eating away at solidarity. Nonetheless, that both Sarkozy and Hollande are playing the anti-EU card illustrates the degree to which the "French street" is questioning the merits of European integration. Recent opinion surveys indicate that the far right and far left, both of which are hostile to globalization and European integration, could together garner more than 30 percent of the first-round vote.

Anti-EU campaign tactics are, however, unlikely to turn into policy. As the financial crisis continues to percolate, the next French president will need to play a leading role in breathing new life into the EU, meaning that he will have to reverse, rather than cater to, public skepticism of European integration.

The election promises to have an impact, although a modest one, on Franco-German relations--still the most important coupling within the EU. Sarkozy and German Chancellor Angela Merkel do not have a close personal relationship, but they have worked well together during the debt crisis, and Merkel has openly backed Sarkozy's reelection. Relations would initially be strained should Hollande win--but only temporarily. Cooperation between Berlin and Paris will remain the union's anchor, giving any French president little room for maneuver.

In Search of Economic Reforms

Sarkozy has made some progress in liberalizing the French economy, but has fallen well short of the "rupture" that he had promised. He raised the retirement age from sixty to sixty-two and made modest revisions to the tax code. He is currently pledging to reduce regulations on employment and reduce the non-wage costs of labor, taking a page from Germany's successful reforms during the past decade. Sarkozy has also said that he wants to cut public spending and increase revenue by capturing taxes from both fiscal exiles and large French corporations with substantial worldwide revenues.

For his part, Hollande pledges to increase spending on education and job creation--positions that play well among the Socialists' electoral base. He has called for a 75 percent tax rate on household incomes above $1.3 million and vowed to do battle with "the world of finance." Hollande has also pledged to roll back Sarkozy's increase in the retirement age.

The economic plans offered by both candidates seem aimed more at wooing voters than offering realistic solutions to France's economic challenges. France's public spending as a share of output is the highest within the eurozone. Deeper reforms than those outlined by either candidate will be necessary to get the nation's debt burden under control, restore growth, enhance competitiveness, and bring down unemployment.

In light of France's history of social unrest and disruptive strikes, politicians across the political spectrum are justifiably treading carefully when it comes to tax hikes and spending cuts. But without more ambitious structural reforms, France could be in line to trigger a new, and perhaps more grave, round of financial turmoil within the eurozone.

The recent killings in Toulouse by Mohamed Merah, a Frenchman of Algerian descent, put renewed focus on immigration and assimilation, already among France's most contentious political issues. Sarkozy is seen as tougher on immigrants than his Socialist rival. He pushed through a ban on headscarves in public schools, has made the preservation of a traditional French identity a signature issue of his presidency, and recently complained of "too many foreigners" in France, the EU member state with the largest Muslim population.

Sarkozy is to some extent positioning himself to undercut the appeal of Marine Le Pen, who is openly hostile to immigration and wants France to leave the eurozone. Meanwhile, the center-left embraces a more tolerant stance on immigrants, and claims that right-wing policies and rhetoric are exacerbating the polarization of French society.

This article originally appeared at CFR.org, an Atlantic partner site.