The French have just confirmed their political creativity. In other Western democracies, a presidential election leads to the clear-cut victory of one candidate over another, along with the endorsement of a more or less predictable program. Not so in France. On April 22, the elections first round, French voters were free to choose from among ten contenders, including Trotskyists, radical ecologists, and a representative of Americas Lyndon Larouche cult. In the second round, concluded Sunday among the two remaining challengers, voters rejected incumbent president Nicolas Sarkozy in favor of Socialist François Hollande. Now Hollande, the nations new president, faces a much less forgiving electorate: the financial markets, which will determine whether he can save France from a Greek scenario of default and bankruptcy.
The first round was most significant for revealing the strength of the so-called populists. Including groups on the right and left, populists tallied one-third of the vote. The far-right National Front won slightly above 18 percent of the vote, allowing Marine Le Pen to outperform the past achievements of her father, the party founder. On the other end of the ideological spectrum, a Communist Partysupported candidate, Jean-Luc Mélenchon, won 11 percent. A loose collection of other marginal candidates also won a small portion of votes. While the candidates of these diverse parties went at one another furiously during the campaign, they all, more or less, represent the same forgotten or downtrodden segments of the French population: those who live in the nostalgic glow of Frances glorious past, when Imperial France dominated the West and when jobs were stable and protected from competition by high tariffs. The far right may be more xenophobic and the far left more revolutionary, but they share an anti-European, anti-euro, anti-market, anti-competition agenda. They advocate a stronger state to protect the so-called French way against any foreign infringement—whether ideological or ethnic.
In a nutshell, one-third of the French, in the first round, expressed support for some version of the populism that pervades Western Europe. France will be difficult to govern if one-third of its citizens feel disenfranchised and opposed to the overall direction of French society concerning European integration, cooperation with the U.S. against terrorism, and participation in the global economy. The first-round results, moreover, ensure that these groups will remain discontented: whatever their differences, Hollande and Sarkozy are not populists. Both are rational and accept the world as it is.
Contrary to popular impression, the second round merely confirmed how close the two rivals are—their identities as left and right candidates notwithstanding. Hollande bears little resemblance to the socialist firebrands France embraced through the era of François Mitterrand, president from 1981 to 1995. His views are closer to the German Social Democrats or British Labor than to the obsolete Marxist tradition. He did not propose nationalizing industries and banks, the core of Mitterrands 1980s platform. In fact, Hollande hardly mentioned the necessity for public investment to rekindle economic growth. He only cautiously promised to increase the number of teachers (the Socialist Partys core constituency), and except for promising to close one of Frances 50 nuclear plants—a symbolic gesture to Greens—he made no attacks on nuclear energy. Above all, in a complete rebuttal of the French Socialist tradition, Hollande promised to contain public expenses and balance the budget in compliance with European treaties. He uttered not a word against the independence of the Frankfurt-based European Bank, issuer of the euro, a currency shared by 330 million Europeans in 17 countries. His only modest quibble with the German-led so-called austerity strategy was to suggest that the word growth be added to the Banks statutory obligations (up to now, its only duty has been to maintain price stability).
Such a shift from socialism as we knew it to a center-left social democracy considerably narrowed the ideological gap between Hollande and Sarkozys more rightist platform—especially since the French right has been traditionally more statist than free-market-oriented. The run-off campaign, then, was far from a clear-cut debate between a free-market right and a statist, or at least Keynesian, left. It instead became a competition for financial virtue: each candidate suggested that the other was not up to the task of reducing the public deficit. Sarkozy, a tactician lacking strong convictions, knows that his countrymen dislike the free market and expect the state to alleviate their existential anxieties. He thus said nearly nothing about what entrepreneurship and economic innovation could bring to the French economy. He did not mention the labor market rigidity that is one of the major causes of the nations 10 percent unemployment rate. Avoiding unpopular economic issues, he tried to shift the argument toward issues of national identity and border control, the Lefts weak point, at least from a rightist and populist perspective. It didnt work.
Hollandes victory appears to be less an endorsement of him than a referendum on Sarkozy. The new president remains a broadly unknown, untested politician with no clear agenda. Based on Hollandes campaign, French citizens understand only that he is no Sarkozy. It remains to be seen how he will govern and above all, how he will manage the looming sovereign-debt crisis.
The new president will have to contend with two unpredictable forces: the French populists, often ready to take to the street in protest, and the financial markets. With enough police, a French president can control the Paris street; but he cannot compel Wall Street to buy French Treasury bills at sustainable rates. So far, no head of state—whether in Spain, the United States, or Japan—has devised a convincing way to balance the national budget. Thus, all Western economies suffer unsustainable debt, and all stand on the verge of a sovereign-debt crisis—a shared malady born of 30 years of public profligacy.
The way forward is, as the Germans suggest, austerity—a precondition for growth. In France, by a remarkable historical irony, it may fall to a formally socialist president to carry this program forward.
Guy Sorman, a City Journal contributing editor, is the author of numerous books, including Economics Does Not Lie.