'Watershed' elections in France today ...
(snip)"France is a good test case. Its socioeconomic troubles are nothing unusual for Old Europe--from stagnant growth to a debt-ridden welfare state to restive, underemployed young Muslims. But the political barriers to tackling these problems are highest in France. The presidential election, pitting center-right Nicolas Sarkozy against Socialist Ségolène Royal, might provide a mandate for change. According to an Ipsos survey on the day of the first round of voting April 22, the three main issues were unemployment, purchasing power and economic insecurity.
In the runoff, Ségo and Sarko have proposed very different solutions. Ms. Royal would bump up the minimum wage, already the highest in the OECD, by 20% and spend lavishly on social programs. She wants to make life easier for business, but the bulk of her program is old school Socialism. If Ms. Royal is the vision of a reassuring but untenable past, Mr. Sarkozy promises an uncertain, tumultuous, possibly brighter future. He mixes free markets and protectionism, yet emphasizes "action" and "rupture." The man wants to shake France out of its doldrums, the woman to softly nudge.
Even France may be ready at last to abandon statist orthodoxy. Mr. Sarkozy got 31% in the first round, the highest score for a right-wing candidate since 1974, and heads into the runoff with a nine-point lead in the polls. French voters are saying something must truly change. But will it?
Germany gives a half-reassuring answer. The "sick man of Europe" a few years back, a nickname today applied to France, the world's third-largest economy notched a recent high of 2.7% growth in 2006 and saw joblessness last month fall to its lowest level in five years. The previous government's limited welfare reforms helped, but the real credit goes to Germany's private sector.
Global competition, free capital flows and the single European currency have forced Deutschland AG to go around the politicians and get its act together. German companies restructured, outsourced aggressively and won wage concessions from unions. Now the world's biggest exporter can take better advantage of globalization. Last year, exports grew 13% and investment 8%, driving the revival, since consumption was up only 0.9%. Likewise in Italy, the private sector bypassed a shambolic state to pull the country out of recession; look at the turnaround at Fiat.
Europe's last watershed election was Margaret Thatcher's in 1979. Thanks to her and the Reagan Revolution, as well as globalization, politicians today matter less. In spite of Mr. Brown's penchant for stealth taxes and regulations, New Labour's commitment to leave Thatcherite reforms in place means that investors have little to fear from the change of leadership in an economically vibrant Britain. The Nordics, Ireland and Spain are all doing well after opening up their economies in recent years.
Alas, in the "Big Three" the pols have a central role to play--mainly to undo the policy mistakes of the past. Whether for lack of conviction or political will, they're falling short. Content with high approval ratings, Chancellor Angela Merkel has shelved her promises of flat taxes, the easing of firing restrictions and an overhaul of the health system. Her one big move was a three-point increase in the VAT this year, showing that Continental politicians can still do plenty of damage. Retail sales are down 9% in the first quarter. Italy's Prime Minister Romano Prodi pushed through some deregulation but also a big tax increase.
France's next President inherits an arguably tougher situation. Exports and market share abroad are falling and the French outsource less than Germans or Italians. France lags Germany on labor and welfare liberalization, which along with regulation and high taxes stifles innovation and economic growth. Capital and skilled workers are moving out of France.
The campaign may have culminated in a clear left-right split, but with little room for free-market ideas. In a telling moment in Wednesday night's presidential debate, Mr. Sarkozy declared in his concluding statement that his priority was "to protect France from delocalisation," or outsourcing. He didn't provide details along the lines of Ms. Royal's tax on companies that move operations overseas. In France, both left and right have pushed statism as well as market reforms when convenient, but neither has yet embraced anything even resembling a Thatcherite agenda.
Until a political consensus emerges in the Big Three that competition is the surest route to job creation, lower prices and higher wages, don't hold your breath for a genuine European economic renaissance."(snip)
Re: 'Watershed' elections in France today ...
here's what the french people are voting on ...
Re: 'Watershed' elections in France today ...
and here's what they decided ...
(snip)"Although opinion polls regularly suggested voters preferred Royal, who was seeking to become France's first woman head of state, they saw the uncompromising Sarkozy as a more competent leader with a more convincing economic program.
Sarkozy, the son of a Hungarian immigrant, presented himself as the "candidate of work", promising to loosen the 35-hour work week by offering tax breaks on overtime and to trim fat from the public service, cut taxes and wage war on unemployment."(snip)
(snip)"Sarkozy's own personality has been questioned. Critics say he is impulsive, authoritarian and likely to exacerbate tensions in the poor, multi-racial suburbs that ring many French cities.
The Socialists accused Sarkozy of fuelling 2005 suburb riots by promising to rid neighborhoods of what he said were the "scum" responsible for the troubles. Royal said on Friday a victory for her rival would fan "violence and brutality".
Thousands of extra police have been drafted in to patrol sensitive suburbs, especially those close to Paris.
By backing Sarkozy, voters showed they wanted a strong leader to resolve France's many problems, including high unemployment of at least 8.3 percent, falling living standards, job insecurity and declining industrial might.
He has promised a clean break with the policies of Chirac, once his political mentor, and says he will curb the powers of the unions and toughen sentencing for criminals.
On foreign policy, Sarkozy is more pro-American than Chirac, but has made clear he opposes the war in Iraq and will find it hard to ally himself too closely to Washington because of anti-U.S. sentiment at home."(snip)
Re: 'Watershed' elections in France today ...
and here's what Sarkozy considers important ...
(snip)" Provided his party wins June parliamentary elections, lawmakers will be asked to vote on a budget that scraps payroll charges and income taxes on overtime hours. It would also eliminate inheritance taxes for all but the richest 5 or 10 percent and introduce a tax deduction for mortgage-interest payments.
Criticized as divisive and dangerous by Royal, 53, during the campaign, Sarkozy may not have much of a honeymoon. He has said he would push through a law in September requiring a minimum level of service by transport workers unless unions negotiate a deal by the end of summer. An impasse may lead to strikes that could set the tone for the rest of his presidency.
`Casus Belli'
``Transport reforms could be a casus belli,'' said Nicolas Sobczak, a Paris-based economist at Goldman Sachs Group Inc. ``But it's hard for grass-roots unionists to mobilize with Sarkozy winning with a big margin.''
Strikes crippled the French economy for three weeks in 1995, when Chirac unsuccessfully tried to reduce pension privileges of public-sector workers in his first year.
Sarkozy also risks running into opposition from public- sector employees because he has pledged not to replace half of the civil servants retiring over the next five years and to roll back some transport workers' pension benefits. "(snip)
" Police fired tear gas at anti-Sarkozy demonstrators at Paris's Place de la Bastille. About 1,500 people were gathered on the steps of the Opera, others were around the statue in the center of the square, where they had daubed a slogan ``Sarkozy in 2007 = Hitler in 1933.''
Sarkozy inherits an economy whose share of European exports is shrinking and whose growth is likely to lag behind Germany's for a second year. The jobless rate of 8.7 percent is the highest among the 13 nations that share the euro.
He blames the 35-hour work week, above-average taxes, and generous unemployment benefits for discouraging initiative and holding down salaries.
To boost hiring, Sarkozy, who was Chirac's interior minister and finance minister for four years, has pledged that his government will confer with business federations and labor unions by the end of the year to make firing procedures quicker and more predictable in exchange for increased unemployment benefits and extra training for jobseekers.
EU Conflicts
Sarkozy says he'd make students' earnings tax free and to give universities more autonomy to manage their staff and real estate and to create partnerships with businesses.
Chirac's successor, who campaigned on law and order, said he'd introduce a law in July that toughens sentences for repeat offenders, and a separate law that will aim from preventing immigrants who don't have a job and an apartment from being joined by family members. "(snip)
Re: 'Watershed' elections in France today ...
and here's why he got elected ...
"PARIS (AP) - Nicolas Sarkozy won the women's vote and fared well among blue-collar workers, even though his rival for the French presidency was a woman and a Socialist.
It was one of the surprising subplots in Sarkozy's resounding election victory over Segolene Royal - and shows his vision of pro-market reforms and scaling back immigration appeals to a wide audience.
Sarkozy's ability to attract votes from a broad spectrum of the public is an early indication he may be able to overcome his image as a polarizing force and achieve crucial popular support for pushing through his ambitious program of overhauling France's welfare system.
Official figures showed Sarkozy won France's one-time industrial heartland in the north, which French media said had not voted for a rightist presidential candidate since Charles de Gaulle in 1965.
Sarkozy even tallied nearly 44 percent of the vote in the Seine-Saint-Denis region north of Paris, where a wave of rioting erupted in late 2005 while he was interior minister and infuriated many there by calling troublemakers "scum."
Right after his victory, angry youths burned cars and clashed with police in several cities. Police reported Monday that 730 cars were burned and at least 592 people detained overnight across the country, while some 78 officers were injured.
On Monday night, several hundred people massed for a second night at the Place de la Bastille in Paris, breaking windows in shops and starting street fires. Riot police dispersed them.
Experts said Sarkozy was able to steal working-class votes from the left by playing up his tough cop image and by pounding away at the theme that he believes in rewarding hard work.
"The main attraction among workers were the security-immigration duo, which works, and the values of hard work: He put the emphasis on increasing purchasing power," said Frederic Dabi, a pollster with Ifop. "(snip)
"In the campaign, Sarkozy dared to attack the status quo with calls to do away with inheritance tax on small and medium estates and cut the number of public sector workers. He also evoked issues of national identity and immigration that were once the stomping ground of extreme-right nationalist Jean-Marie Le Pen.
While Sarkozy found a formula to win an election, he faces a much steeper challenge implementing his vision of tax cuts and freer markets that promise to cut into the social protections many French hold so dear.
He is certain to face resistance from unions to his plans to make the French work more and make it easier for companies to hire and fire.
The election left little time for celebrating: Legislative elections are slated for June 10 and 17, and Sarkozy's conservative UMP party needs a majority to keep his mandate for reforms. A win by the left would bring "cohabitation" - an awkward power-sharing with a leftist prime minister - which would put a stop to his plans.
Sarkozy has drawn up a whirlwind agenda for his first 100 days in office and plans to put big reforms before parliament in July. One would make overtime pay tax-free to encourage people to work more. Another would put in place tougher sentencing for repeat offenders, and a third would toughen the criteria for immigrants trying to bring their families to France.
Congratulations poured in from around the world Monday, with British Prime Minister Tony Blair sending one - in French - via YouTube. The president-elect, meanwhile, left a Paris hotel wearing jeans Monday and headed off to reflect on his new job on a yacht off the coast of Malta, a Mediterranean archipelago.
President Bush also welcomed Sarkozy's victory, and there was much talk in Washington about the likelihood for better relations with a France led by the U.S.-friendly conservative.
"We certainly look forward to cooperation with the French," White House press secretary Tony Snow said. "We know that there are going to be areas of disagreement. But on the other hand, there are certainly real opportunities to work together on a broad range of issues."
Sarkozy is as critical of Iran's nuclear program as is the U.S., and he has chided the French press for its anti-American tone. But he will not be in lockstep with Washington: He has called the Iraq invasion a mistake and says the Bush administration should do more on global warming
According to the Ipsos poll, Sarkozy cruised in his traditional electoral base: 82 percent of small business owners, and 67 percent of farmers voted for him. Befitting a conservative, he won 61 percent of votes by those over age 61, and 68 percent among voters 70 or older.
Royal's best showing was among 18- to 24-year-olds, but Sarkozy tallied 57 percent among the 25- to 34-year-old tranche."(snip)