I have written frequently in this blog about many countries I admire, most recently Brazil. However, there is only one country to which I am very attached and in which I have lived, worked and owned property, but which has not featured prominently in these pages. That country is France.
What prompts me to write today about this always elegant, usually rational and sometimes maddening nation is the current race for President of the Fifth Republic. Even by French standards this years's campaign is shaping up to be a campaign of economic suicide. The first round of the election will be held on April 22 and if, as is likely, no candidate achieves an outright majority, a run-off between the top two candidates will be held on May 6. The two current front runners are the incumbent President, Nicholas Sarkozy, of the center-right UMP party, and the current leader, Francois Hollande, of the Socialist party.
What I find remarkable about this election is the economic policy upon which Hollande is campaigning. He has promised to reduce the retirement age from 62 to 60; raise the tax rate on high-earners to 75%; renegotiate the recently-agreed European fiscal treaty; and wage war against "le monde de la finance." Now, if Europe, including most pointedly, France, were not facing a near-existential financial crisis, these sort of campaign promises could be dismissed as harmless populism, but the stakes are much higher this election. First, Europe is by no means out of the woods despite the breathing spell afforded by Mario Draghi's decisive action at the ECB. Second, Hollande is not just a fringe candidate seeking to motivate his faithful; the polls have him well in front with less than two months to go before the expected run-off election. Third, these are not ordinary times – global markets remain on edge – and these are not merely symbolic measures like Lionel Jospin's mandated 35-hour work week in 2000. Finally, responsible governments in Europe are going in the other direction, seeking to raise retirement ages not reduce them.
In fairness, President Sarkozy has also staked out some economically indefensible positions. Playing to the extreme right, Sarkozy has vowed to slash immigration in half which is not only questionable on humanitarian grounds, it is bad economics (at least in the longer run) for a country with an aging population and a low birth rate. Otherwise, as far as I can tell, President Sarkozy has done a decent job in office, but when I expressed this opinion recently to a French friend, he replied "we just can't stand to watch his face on TV any longer."
So as things stand now, France is likely to elect a new president within the next two months. Perhaps, as Hugo Dixon has argued recently in Reuters Breaking Views, this is not as dire economically as I make it out above because Hollande's "reforms" are likely to be heavily caveated and watered-down. However, as someone who believes that too many continental governments have been pandering to their citizens and delaying their day of reckoning for much of the post-war period, this latest election contest strikes me as one more good crisis wasted. My only worry is that the next one will be worse and the ECB printing press will have run out of paper to print.