On July 14 French citizens came together as they do each year to remember the revolution and the shared values it made way for in the republic of today: Ones of freedom, equality and brotherhood.
In many ways this Bastille day was no different from the others: The traditional parade proceeded (albeit on lower budget), the fireworks lit up the night sky in a show of Gallic pride unchanged for decades. The President seemed so caught up in the jubilant atmosphere he even had the temerity to suggest Europe’s second-largest economy was expanding again — despite official figures suggesting the contrary.
Flanked by his troupes on the Champs Elysees, the embattled leader — who also serves as head of the army — was in fighting mood: vowing to wage war on the ‘national pessimism’ which has continued to undermine his Socialist government more than a year since its election.
So much for this being the day — of all days — when French men and women are supposed to feel proud of themselves and their country! Contending with approval ratings at an all-time low and unemployment at a 15-year high, the President’s recent performances have painted the picture of an increasingly desperate leader, clutching at straws with an empty policy book at his disposal.
He’s been wrong footed by the seemingly endless Eurozone crisis — one which he recently tried to convince a Japanese audience was now over — and presided over a downgrade of France’s credit score now by all three of the major ratings agencies.
True, Hollande inherited a poisoned chalice: an economy stuck in reverse gear with massive structural hurdles to overcome. The task was never going to be easy. But burying his head in the sand will do no good.
You don’t have to be an economist to realise confidence can’t be conjured up at will — rather it comes as the result of being able to create the conditions for growth and prosperity. And to offer that future, France’s leader needs to stop procrastinating over the difficult choices and show his country and others that he has a plan.
With public spending making up the lion’s share of GDP, France’s love affair with the state is leaving it out of sync with the rest of Europe at time of huge government retrenchment elsewhere.
As if to confirm this fact, the French government was recently forced to admit it wouldn’t be reaching its deficit targets as early as it had expected and appealed to Brussels for a two-year extension.
Economists were hardly surprised: they had always said Hollande’s 2013 budget looked hopelessly ambitious from the moment it was unveiled.
After plundering big business and wealth creators alike with exorbitant taxes, thwarting cross-border takeovers and failing to comprehensively tackle the nation’s competitiveness issues, Hollande risks branding France an anti-capitalist country at the heart of the common market.
And now he enters the more uncomfortable phase of his tenure, one which won’t affect the country’s jet-setting elite who can easily afford a one-way Eurostar ticket to London, as one CAC 40 CEO told me not long ago.
Instead Hollande’s next moves are likely to make him even more unpopular, hitting the pocket of the millions of average earners: For — like it or not — he will now have to tackle the much thornier issue of spending.
France’s gargantuan social security net has tripled since the 1968 student protests whose ideals so shaped its current President, creating unaffordable expectations which future administrations will find hard to finance. Last year’s pension deficit alone was 15 billion euros — a bill which is likely to reach almost 21 billion euros by the end of the decade.
In stripping France of its coveted AAA crown this month, Fitch Ratings said the country’s uncertain growth outlook was likely to undermine its budget objectives for this year again.
In fairness to Hollande, he is not the only French leader to fall foul of the markets: his predecessor Nicolas Sarkozy’s scorn for ratings agencies was legendary. He even tried to regulate them and the tirades he delivered against ‘speculators’ betting against Eurozone members were legendary across the channel in the City of London.
But if Hollande can’t demonstrate to the financial community he is serious about tackling France’s budgetary burdens and legacy imbalances, it’s not just his people who won’t have confidence, it’ll be his creditors too and the cost of financing such obligations will climb.
France’s president may be a ‘child of 68,’ a man whose ideals are rooted in another era but times have changed and he has to play the card he has been dealt.
Or else, he’ll be history, just like the protagonists of that fateful day 200 years ago — just without the glory.
The writer is a news anchor on CNN International.
