Presidential rivals fight over France`s economy

Last Updated: Saturday, May 5, 2012 - 09:23

Paris: When he came to power in 2007, President Nicolas Sarkozy seemed just the man to shake up France`s sclerotic economy with his promises of a break from the past.

However, any optimism surrounding his victory five years ago has been replaced by cynicism and recrimination.

Socialist challenger Francois Hollande, whom polls are predicting could win the presidency by a margin of several points, hounded Sarkozy for his handling of the country`s economy.

"We have fallen backward," Hollande declared, while belittling Sarkozy`s claim that Socialist policies were to blame for France`s poor performance in recent years. "Our unemployment has risen and our competitiveness has declined. Germany, in all areas, does better than we do."

If Hollande wins Sunday`s election and embarks on a programme to boost his country`s economy, it will raise questions about France`s commitment to reining in its spending while the rest of 17 countries that use the euro embark on a strict period of belt-tightening to convince investors that they can keep control of their debts.

It also throws into doubt the German-French partnership that has led the eurozone`s response to its financial problems and was built on the personal relationship between Sarkozy and German Chancellor Angela Merkel.

There are concerns that if investors are worried the fragile eurozone solution might unravel, they could back away from Europe, sending the continent into a fresh financial crisis.

Sarkozy rode to power in 2007 on promises of sweeping economic and labour reforms that would shake France out of sluggish growth and make it competitive with the world`s emerging economies.

His prime minister, Francois Fillon, vowed a "shockwave of growth" and Sarkozy himself told voters to judge him on his ability to deliver on that promise.

Five years later, at the end of Sarkozy`s first term, however, growth has ground to a halt, unemployment has hit 10 percent, and the national debt has ballooned to 86 percent of gross domestic product.
Some of Sarkozy`s plans for reform have been affected by outside factors. First there was the global economic slowdown touched off by a financial crisis in the US in 2008.
But, it is the debt problems of the 17-country eurozone, of which France is its second-largest economy after Germany, that have most distracted Sarkozy from his domestic agenda.

PTI



First Published: Saturday, May 5, 2012 - 09:11

comments powered by Disqus