The President-elect's honeymoon has ended before it began.
It is barely 24 hours since François Hollande was elected President of France and the sniping has already begun.
Economists, especially from the right but some from the left too, have begun expressing doubts on how he will be able to withstand the buffeting the markets now appear determined to give him. Shares slumped on European bourses the day after his election but rallied somewhat later only to slide again on Tuesday morning.
“The first measures he will take will be symbolic ones and not cost the exchequer a great deal — freezing petrol prices for three months, subsiding water or electricity, adjusting the minimum wage not just according to inflation but also according to growth. He will reduce his own salary and that of his ministers by 30 per cent. And the people will love him for that. But then,” said former conservative Economy Minister Alain Madelin, known for his ultra-liberal, laissez faire views, “comes the hard work — bargaining with Germany on the fiscal discipline pact, changing the mandate of the European Central Bank, raising the capital of the Luxumberg-based European Investment Bank, and creating a new Public Investment Bank for France. How will he deal with an obdurate Mrs Merkel, [the German Chancellor]? Within 10 days the Emperor will be naked.”
Frédéric Lefèvre, a former spokesman for former President Nicolas Sarkozy was equally caustic, and gave the President-elect even less time: “In less than 24 hours, François Hollande's main promise has broken into smithereens. You have seen how Ms Merkel, speaking for Germany, refused any renegotiation of the fiscal discipline pact. And François Hollande who rejected the Golden Rule on fiscal discipline is going to have to apply it! A certain number of Socialist MPs have already told me — the feasting and celebrations are over; it's back to reality. I am telling you that the promises he made will not last beyond a week!”
On a Sunday marked by elections in several European nations, the French poll was the most watched, the most closely scrutinised, especially in Greece, Portugal, Spain and Italy where populations are reeling from the harsh austerity measures imposed on them to curb deficits that have spiralled out of control. Observers initially thought they detected a slight softening in the German hardline attitude on fiscal discipline when Germany's Foreign Minister, Guido Westerwelle, congratulated Mr. Hollande and called for a jointly drafted growth pact.
“Overcoming the debt crisis is a joint objective, a German-French objective,” Westerwelle said. But then came the caveat: “A growth pact does not necessarily mean more spending. That can also be achieved through enhanced structural reforms.”
The final put-down came in Ms Merkel's categorical refusal to change a single letter of the fiscal discipline pact. Mr. Hollande appears to be already in a bind. Europe and European affairs will be his major preoccupations in the months ahead.
The President-elect spent the entire day on Monday shut up with his advisers in the Socialist Party campaign headquarters brainstorming over his ministerial choices. There is a long line-up of hopefuls starting with Party General Secretary and former Labour Minister Martine Aubry, former Prime Minister Laurant Fabius, former European Affairs Minister Pierre Moscovici, his former partner and Presidential candidate Ségolène Royal and a host of other socialist heavyweights.
How he chooses his men and women (he says 50 per cent of the cabinet will be women) will have a direct impact on his party's alliances for the legislative election to follow in a month's time and Mr. Hollande needs a solid parliamentary majority if he is to steer France through what can only be described as turbulent times. At home, he has pledged to tax the very rich at 75 per cent of their income, a hugely popular idea. But even if fully applied, the measure will only net the treasury a very small amount of money. He has said he will modify one of Sarkozy's key reforms on pensions and the retirement age, by allowing some people to retire at 60 instead of 62. He also plans to increase spending on alternative energy such as wind and solar power and decreasing France's dependence on nuclear power.
But some of Mr. Hollande's most important challenges will also be in the international arena. “His main accent will be Europe and he is a true European at heart. But he is aware that we live in a globalised world and is not opposed to globalisation. He wants to save the Euro and that is important for India too since Europe is a major trade partner. He knows the importance of a country like India,” Claude Blanchemaison, former French Ambassador to India told TheHindu. It was during his tenure in New Delhi, in the Chirac years, that the two countries began their strategic partnership in 1998. “Since then,” the former diplomat said, “we have come a very long way indeed. I know there are worries in New Delhi about Mr. Hollande who is virtually unknown abroad and whether he will invest as fully as Mr. Sarkozy did in India. I do not think we need to worry on that score. The cooperation on terrorism will continue, as will our strategic dialogue and he will not step back from the support France has given India on its bid for a U.N. Security Council seat or waver on the nuclear issue. In fact his position on nuclear energy is not that different from Mr. Sarkozy's and he has stated that there will be no closing down of the European Pressurised Reactors.”
Ramesh Mulye, the former Deputy Chief of Mission in Paris who now represents the Confederation of Indian Industry (CII) in France, struck a slightly more cautious note: “Indian entrepreneurs were really struck by Mr. Sarkozy's energy and genuine interest in India. In many ways he galvanised the business communities in both countries, putting India on the map as never before. But no government, however well intentioned, can do much where there is a major economic slump. As far as Mr. Hollande goes, we shall just have to wait and see if he is able to take his eye off Europe and give equal or certainly enough weight to India-French issues. Mr. Sarkozy was well known, well-liked in India and he had a very visible presence. Mr. Hollande is still an unknown entity and at this point in time it is difficult to say what his own investment in India will be in terms of political will.”