Economic debate heats up in French campaigns

Economic debate heats up in French campaigns

PARIS - Reuters
Economic debate heats up in French campaigns

Socialist Party candidate for the presidential election Hollande waves the crowd during a campaign meeting on April 10. Hollande says hen Nicolas Sarkozy tries to call the markets to come to his rescue that is not in the France’s interest. AFP photo

Socialist presidential frontrunner Francois Hollande has accused Nicolas Sarkozy of encouraging market volatility for political ends after the conservative said victory for Hollande could spur a crisis of confidence in France.

With tensions between the two rivals mounting 10 days from the first presidential election round on April 22, Sarkozy has warned that markets could take flight from French securities if Hollande wins power in a May 6 runoff.

 “The people do not want to have some kind of diktat imposed on them from outside, so when Nicolas Sarkozy tries to call the markets to come to his rescue that is not in the country’s interest,” Hollande said on France 2 television.

 “What is in France’s interest is fighting speculation, not encouraging it under the pretext of helping him in the presidential election.”

 Sarkozy - whose main asset in a close-fought duel against the popular but inexperienced Hollande is his record of managing Europe’s debt crisis - has increasingly played on fears of a return to market volatility under a left-wing government.

Unveiling his manifesto last week, he said Hollande would lead France towards the fate of Greece or Spain.

 Hollande is running on a tax-and-spend program which would bring France to a balanced budget a year later than Sarkozy’s manifesto. Economists say Hollande’s spending plans would need to be scaled back to keep France’s efforts to reduce its deficit on track; the targets are seen as crucial to Paris retaining investors’ faith at a time when the euro zone’s debt crisis is refusing to abate.

 “If we start hiring civil servants, if we will start spending again, if we throw the pension reform into question, it’s not a risk that interest rates will rise, it’s a certainty,” Sarkozy said on Wednesday.
 “It would immediately set off a crisis of confidence.”

Hollande is running as many as 10 percentage points ahead of the incumbent in opinion polls for a May 6 deciding round, even though Sarkozy recently nudged ahead in voter surveys for the first-round vote between ten candidates.

Battle for markets

Sarkozy’s effort to persuade voters he is the best man to lead an economic recovery suffered a setback this week when a survey showed growth stalling.

 Finance Minister Francois Baroin, a close Sarkozy ally, also laid into Hollande’s economic programme this week, saying that straying from the conservative government’s target of a zero deficit in 2016 would be “a serious risk.”

 France, which has not balanced a budget since 1974, lost its AAA credit rating with Standard & Poor’s in January and its public finances are still under scrutiny by market analysts.

 Hollande told France 2 that he was committed to restarting growth and sticking to deficit-cutting. “I have no reason to fear a crisis,” he said.

 Hollande and Sarkozy will battle this weekend to draw the biggest crowd to rival political meetings in two big outdoor squares in central Paris.