What has changed in the French politico-economic horizon

François Hollande, President of the French Republic (first from left) received in Paris, Angela Merkel, the German Federal Chancellor and José Manuel Barroso, President of the European Commission (first from right) . Here they are pictured at the entrance of the Presidential Palace in the heart of French capital, surrounded by guards standing at attention. The occasion was a discussion on European competitiveness with Members of the European Roundtable of Industrialists (ERT). (EC Audiovisual Services 19/02/2014).

François Hollande, President of the French Republic (first from left) received in Paris, Angela Merkel, the German Federal Chancellor and José Manuel Barroso, President of the European Commission (first from right) . Here they are pictured at the entrance of the Presidential Palace in the heart of French capital, surrounded by guards standing at attention. The occasion was a discussion on European competitiveness with Members of the European Roundtable of Industrialists (ERT). (EC Audiovisual Services 19/02/2014).

Last Sunday evening, the verdict was in. The party of the right, for many the right party, won the municipal elections in a background of large abstention. Already the first round, had left the left party in a bad shape. This was confirmed in the second round, as the Socialist Party suffered an electoral defeat in a scathingly manner. The extremist right party (Front National) also managed to win a deal. It has won around 15 cities (Fréjus, Béziers, Henin-Beaumont, Hayange…). At the national level, the party of the right won 45,91% of votes against 40.57% for the left party, 6.84% for the extreme right party and 6.62% by candidates not linked to party label.

A nightmare for the French president

Around 155 cities of more than 9 000 inhabitants each were lost by the socialists. Analysts note that Toulouse, the “pink city”, was lost by the Rose of the left party (the Socialist party is represented by the flower “Rose”). Then the Rose lost more of its petals like Angers, Reims, Limoges, Caen, Saint Etienne, Roubaix, Tourcoin… Fortunately, Metz, Strasbourg, Lyon, Rennes and Nantes. The capital Paris remained with the left as from the first round.

The blue wave of Jean François Coppé

Jean François Coppé, the president of the Right party (UMP:Union pour un mouvement populaire) greets “a blue wave” (the UMP is represented by the color “Blue”). This is the first victory since the defeat of Nicolas Sarkosy, the previous French president. Several cities that were lost by the party of the right during the Sarkosy administration have now been won back. Bobigny, Saint-Ouen, Aulnay sous bois and Argenteuil come in this catagory. At the same time, the UDI (Union des démocrates et indépndants) another party of the right, won 100 cities of less than 9000 thousand of inhabitants.

Historical breakthrough of the extremist right party

Last Sunday the FN (Front National) delivered an historical breakthrough since its creation. 9 cities as Béziers, Fréjus, Beaucaire, Hayange will be managed by FN members. Marine Le Pen, the president of the party, was very happy to have managed this and she didn’t restrict herself in celebrating.

The governmental reshuffle

Following this first election test since his accession at the head of the executivet, the French president, François Hollande, is faced with a hard decision. The right party and the majority of the left party have asked him to change his political vision. Prime Minister Jean Marc Ayrault accepted this electoral defeat and recognized his part of responsibility in this story.

On Monday 31 March, François Hollande announced that that PM Jean Marc Ayrault was repleced by Manuel Valls at the top of a “combat Government”. Until then he was Home Secretary in Jean Marc Ayrault’s administration. The French president wanted to react as soon as possible in order to avoiding the announcement of the replacement on April Fools Day, and be spared the jokes.

François Hollande proposed three objectives to Manuel Valls, namely: French economy should become stronger, more social justice and a increased purchasing power for everybody. The new Prime Minister is known as well organized, authoritative and an expert in communication. In any case this is a big stake for the French president, nominating the most famous French politician at the head of his new government, in order to save his own political future.

The European threat

The European Council is still waiting for the French sovereign debt to start decreasing. France should reduce its annual governmennt budget deficit to 3% of GDP by 2015. Presently the gap is 4.13% of GDP. The European Council recently extended the deadline for this adjustment by two years.

The French government should start applying the right policy mix at the end of this month in order to reach the 3% benchmark on time. If it fails, the European Council will have to punish France. Can the new French government reach this European Council requirement?

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