The Daily Update - French election

With Brexit and the election of Donald Trump as US President, 2016 has been a year of political change, perhaps even revolution.  Populist politics is seemingly the new zeitgeist as voters have vented their dissatisfaction with rising inequalities blamed on globalisation and more liberal policy agendas instead favouring more conservatism and protectionist approaches to areas such as immigration and potentially trade.  This trend is also spreading to Continental Europe where the Italian referendum on constitutional reform is due on December 4 but could end up being a protest vote against the incumbent government and ‘economic malaise’.  The ongoing primaries for the French Presidential Election next year are also sowing the seeds for a departure from the status quo.

Given global events, expectations are that Marine Le Pen is likely to at least make it to the second round of the French Presidential election but the primary for the Republicans is also generating political shockwaves.  François Fillon was the surprise winner of the primary round of the election for the right-wing Republican Presidential Candidate taking 44 percent of the vote ousting the former French President Sarkozy who only garnered 20.6 percent of the vote.  Alain Juppé, who had been the apparent front-runner, only secured 28.6 percent of the vote.  Fillon will now compete against Juppé in the deciding vote on 27 November and Sarkozy has backed Fillon.  However, to vote one does not have to be a party member but only to pay €2 and register so there has been a contingent of tactical voting against Sarkozy and it is not clear how or if they will vote again.

The winner of this round is most likely to face the far-right candidate Marine Le Pen in the second round run-off in next year’s French Presidential Election: the economist estimates that Marine Le Pen has a 40 percent chance of winning the Presidential Election which is not that surprising given her party secured 27 percent of the vote in the regional elections in December 2015.  The left candidates are looking like they will not capture a large enough share of the vote to make the second round. François Hollande’s approval ratings are at an all-time low and he will likely decide whether to run again in the socialist primaries after the republican candidate is elected.  But regardless of this, the socialist vote looks divided with Emmanuel Macron running as an independent and another leftist candidate, Jean-Luc Mélenchon, also likely to take some of the votes.

François Fillon has been labelled an economic liberal with a reform driven agenda (with Thatcherite tendencies); he prefers to describe himself as a pragmatist.  One of his key themes is that France needs change: ‘If we continue with policies that don’t change how the French live, then we will end up with the far right. I can respond to the France that wants more authority.’  His policies include measures such as lengthening the work week (to 39 hours from 35), increasing the retirement age to 65 and better immigration controls.  He has also vowed to eliminate a half million public sector jobs, cut spending by 100bn euros (USD106bn) and proposes a 50bn euro tax cut (although increases to VAT) and shift away from deficits. Fillon is ready to work with Donald Trump and is said to want a closer relationship with Russia.  On other matters such as gay adoption he is extremely conservative being a devout Catholic.

Fillon, who was Prime Minister when Sarkozy was President, may in practice struggle to implement all the changes he talks about: some of his proposals are bound to face opposition from the unions.  In contrast, Juppé was Prime Minister (1995-1997) under Jacques Chirac and is perceived as having a more centrist approach and is less extreme on immigration than Fillon.  He is also looking to raise the retirement age to 65, to increase hours worked beyond 35 and tax cuts (although increases to VAT) but he is targeting only 200-300,000 public sector job cuts.  Both candidates are pro-Europe.   But Juppé may face more scrutiny in a run off about his past having been given a 14 month suspended sentence in 2004 and been barred from holding office for a year in the 1980s.

What does seem clear is that people in France are dissatisfied and frustrated with the status quo.  With 283 terrorist related deaths since January 2015, an unemployment rate still around 10 percent momentum looks to be with candidates offering change.