France crisis talks

NOBODY is going to lead France to recovery

Francois Hollande holds crisis talks after 'worst week' for bruised party

Factory closures and spending deficit have fuelled voters' doubts over ability of president to lead country to recovery

the Guardian,

28 October, 2012

President François Hollande will meet the heads of global economic organisations for crisis talks on Monday after suffering a series of damaging economic blows in what was his worst week since taking power five months ago.

The French leader has been hit by soaring unemployment figures, further factory closures and job losses, and plummeting popularity on top of growing fears that he and his Socialist government are failing to address the country's problems. Members of the opposition right-of-centre UMP have accused them of being "amateurs".

The meeting with chiefs of international organisations, including the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development and World Trade Organisation, has been billed by the Elsyée as a "sharing of views".

However, sources told the Observer the economists will urge Hollande to press on with key structural reforms to improve France's competitiveness on the world market and restore confidence at home and abroad. World financial institutions are said to be encouraged by Hollande's efforts to reduce France's large public spending deficit, but are seeking more from the French leader.

Hervé Boulhol, a senior OECD economist, said France needed "deep structural reforms" to improve public and global confidence in the country. "Then people will believe there is a clear political direction towards tackling unemployment, public spending and competitiveness. It is these three things that need to be addressed," he said.

"At the moment, France is just above average in Europe, but if we are to avoid the extreme situations other countries have found themselves in, one has to find a way out of this crisis. There's no room for complacency."

As the French head off for an autumn break after weeks of increasingly gloomy news, commentators have warned of growing anguish and despair among voters and deep disillusionment with the country's Socialist government.

"People knew there would have to be, as Churchill said, blood, sweat and tears and this was never going to be popular," Jérôme Fourquet from the opinion pollster Ifop, which carries out regular surveys of the public mood in France, said: "They knew there would be tax rises and reforms, whoever was elected, and they were prepared to make the effort, even if painful, if it was worth it. But with the situation seemingly getting worse, people don't see a light at the end of the tunnel and Hollande is not providing one. This has made people pessimistic, anxious and fearful."

The French, pollsters admit, have a tendency to be "morose", but the metaphor of an economically battered France as a ship in a storm taking on water, while passengers look desperately to the captain to save them, is often heard these days, along with concern that Hollande and his Socialist crew are not sufficiently experienced to handle the crisis.

In such a climate, the slightest faux pas has created a full-blown tempest. Last week prime minister Jean-Marc Ayrault suffered what was dubbed Black Wednesday after announcing the French Constitutional Court was to scupper a housing bill before the council had even sat down to decide. The government was bashed again for appearing to lobby against a report it had itself commissioned, on how to improve France's economic competitiveness and plug a trade deficit that reached a record €70bn (£56bn) in 2011, after its author suggested a "massive" cut in business taxes.

News that unemployment, having broken the 3 million barrier in August, had leaped by 46,900 in September, the highest monthly increase since 2009, plus more factory closures and layoffs, made the general gloom even murkier.

Carine Marcé of pollster TNS-Sofres, whose recent survey discovered that 70% of French people thought things could only get worse, said the daily bad news had created a vicious cycle.

"Every day there is the announcement of more job losses and people worry even when it doesn't affect them, because they think they're next. And when people are worried, they consume less and it becomes the snake biting its own tail." She added: "The French have been morose for 30 years; François Hollande fed them hope of things improving but the French had no great expectations. They knew their country had been hit by crisis and there was no magic solution.

"People are not convinced by the government, not convinced they are good enough. They used to say, 'France is not Greece or Spain', but now they are beginning to worry it is heading that way."

Fourquet agreed that the popularity of the president and PM had suffered a "brutal and spectacular fall", but said the causes were mostly out of their control. "The factors behind this are unemployment, redundancies, factory closures, the drop in spending power, the rising price of energy and petrol. All this weighs heavily on the morale of the French, but it's not just a problem in France."

Laurence Sauvage, national secretary of the leftwing Parti de Gauche, describes the atmosphere in France as "toxic" and warned it was conducive to driving voters into the arms of the extreme-right Front National.

"The Left has incredible, historic power in France... but the government is not rising to the occasion," she said. "It is sad to see how afraid and unhappy people are."

She added: "François Hollande promised the time for change was now. But there's no change, just disillusion. If this continues, people will be beating a path to Marine Le Pen."

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