Financial Corset To Rule France, Whoever Wins Poll
While French President Nicholas Sarkozy paints Socialist challenger Francois Hollande as a threat to the stable euro and France's fiscal discipline, such as it is, economic reality will set a similar course for whomever wins the presidency, Reuters reported in an analysis. The political rhetoric has aimed to magnify the gap between their economic programmes, but it broadly boils down to a timing difference; conservative Sarkozy has committed to balancing the budget in 2016, while Hollande, who leads polls by as much as 10 percentage points for the May 6 runoff, has set a 2017 deadline. Whoever wins will have to convince the markets that Paris, despite its weak growth and poor finances, has more in common with the soundest borrowers in northern Europe than the debt-laden countries on the euro zone periphery. "On financial markets, there is a lingering doubt," said Oddo Securities economist Bruno Cavalier. "The first aim is not to send the wrong signals, so that investors don't start asking themselves serious questions about deficit reduction." Both candidates have pledged to cut the deficit to an EU limit of 3 percent of gross domestic product (GDP) next year, and while Hollande's ability to deliver is untested, having never held a high-profile cabinet post, Sarkozy's record is not entirely supportive. One of the first things he did on taking office in 2007 was to inform his euro zone partners that he was tearing up Paris's fiscal targets. History, indeed, is against them both; France has not balanced its books since 1974. Read more.