As he addressed the U.N. General Assembly on Tuesday, French President François Hollande probably had to fight off the urge to cast concerned glances across the Atlantic. Because while his speech may have represented Hollande’s first solo moment in the global sun, the French leader remained painfully aware of the foul political weather raging back home — and storms he’s likely to confront in the perilous weeks to come.
How bad could things actually be? For starters, economists expect August unemployment figures due Wednesday to show the French jobless level exceeding the 3 million mark — a dismal threshold not surpassed since 1993. If so, those numbers won’t take into account a flurry of lay-off announcements expected this week by large French companies. Those began on Tuesday with pharmaceutical giant Sanofi unveiling plans to shed 900 jobs by 2015 — a smaller number than feared, though only because Hollande’s Socialist-led government pressured the profitable group to limit cuts. Such restructuring moves by moneymaking and struggling companies alike come ahead of statistics due Sept. 28 that are likely to show French growth was flat in the second quarter of 2012 — the third consecutive period of 0% performance.
And there’s more where that grim news came from.
About the time the Q2 GNP figures come out on Friday, Hollande’s government will unveil its proposed 2013 budget outlining $38.7 billion in spending cuts or increased revenues — two-thirds of which will come from tax hikes. That belt-tightening aims to fulfill Hollande’s pledge to lower France’s budget deficit from 4.5% of GDP this year to the E.U. limit of 3% by 2014. Yet even that pain may not suffice to meet the target. State auditors have said nearly $40 billion in 2013 budget savings will be needed to fulfill deficit objectives if growth equals 1%. Fully $50 billion will be required if the economy expands by 0.5%. Most economists call 0.5% more realistic — and a tad optimistic at that.
The prospect of so much pain without the highly touted deficit gain would do nothing to slow Hollande’s accelerating slide in voter esteem. Amid a worsening economic and employment climate that his Cabinet has seemed slow to respond to, Hollande’s approval rating slipped from a high of 61% in May to 54% in August. This month saw a dizzying approval drop of 11 points to the current 43%.
In fairness, part of the increasing chilliness toward Hollande is the inevitable waning of voter enthusiasm and patience with newly elected leaders who came to office amid high expectations. That frigidity has been even more pronounced this time because of the growing severity of France’s and Europe’s economic crisis. It may not help that Hollande insists on soft selling remedial policies that his flamboyant predecessor Nicolas Sarkozy tended to trumpet as deliverance from certain doom. Of late, Hollande has sought to depict his perhaps uninspiring but consistent policy management as the steady-as-you-go tortoise to Sarkozy’s harelike tendency to rapidly change course as political winds shifted.
“The outset of terms are periods when expectations are considerable,” Hollande told a press conference on Sept. 22 in Berlin, alongside German Chancellor Angela Merkel, when asked about his slumping numbers. “The ends of terms are the times when results are required. I ask to be judged on the results I attain, and those will take time.”
So will putting out fires in his own backyard — because the other major preoccupation haunting the French President’s thoughts during his U.N. speech was the growing policy rift that has engulfed his leftist legislative majority and his Cabinet. The row centers on the E.U. budget pact that Sarkozy and Merkel orchestrated amid the euro crisis earlier this year. Hollande long rejected the treaty as 100% austerity, certain to kill what little growth was left in the euro zone. Once elected, however, Hollande negotiated a new chapter containing economic stimulus spending — and promptly pledged to pass it into French law.
But a small but vocal group of harder-left parliamentarians in Hollande’s Socialist Party continues to oppose the pact as enshrining excessive austerity. They threaten to break ranks with the majority to vote against it, despite the stunning blow that would deal to Hollande’s presidency so early in his term. Worse still, leaders of ecological parties serving as the Socialists’ junior partner in Parliament last week overwhelmingly agreed to vote against the pact when it comes to vote in October. That has prompted calls among Hollande loyalists — and conservative opponents — for two ecological Cabinet members to leave or be expelled from the government.
Green Party official and European Parliament member Daniel Cohn-Bendit was similarly outraged by the ecologist rejection of the pact, which he termed “dramatically lame.” Suspending his membership in the ecologist coalition, Cohn-Bendit mocked his erstwhile colleagues as being “irresponsible and incoherent” in trying to support and oppose Hollande on different fronts in the same fiscal battle. “Voting against the pact while elsewhere voting for the budget that’s a direct consequence [of the pact] is total nonsense,” Cohn-Bendit told the daily Libération on Sept. 24. “Evidently, political courage and coherency isn’t their concern. They’ve only understood that if they vote against the budget they won’t be part of the majority and no longer [welcome] in the government.”
Despite the considerable controversy the rift has sparked, it’s believed the E.U. pact will gain enough support from Socialist parliamentarians — and euro-concerned conservatives — to win passage. In the meantime, the two ecologist members of Hollande’s Cabinet are assiduously staying clear of the row and keeping their views of the pact to themselves. That may be sufficient to paper over the fissures until both the treaty and the painful 2013 budget become law. But it will remain a headache further complicating Hollande’s uphill efforts to remedy a darkening economic and employment outlook, overcome the euro crisis and restore the waning faith of French voters.