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
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