Big business and Europe hail ‘France’s Tony Blair’

Big business and Europe hail 'France's Tony Blair'
French president François Hollande was compared to Tony Blair on Wednesday after his speech promising economic reforms. Not all of the comparisons were complimentary. Photo: ADP/Hockeyshooter/Flickr
The French President François Hollande's planned reforms to cut labour costs for businesses by €30 billion were hailed by big business, European finance chiefs, and even his enemies on the right on Wednesday and led many to conclude that France had found its own Tony Blair.

Business leaders, European finance chiefs, the Germans and even his sworn enemies on the Right of French politics were all happy. However, there were few smiles on the Left .

This was the general reaction to Hollande's speech given during a high profile press conference, in which he managed to dodge a grilling about his private life, to announce several planned economic reforms that included cuts to taxes, labour costs and public spending.

Hence the welcome his planned reforms were given by business leaders and the accusations from the Left that he had sold out. 

During his press conference Hollande focused on reviving France's beleaguered economy, laying out a "social democratic" vision at odds with election promises to boost spending and crack down on the rich.

Insisting that a return to economic growth was essential to France "retaining its influence", Hollande announced plans for 50 billion euros ($68 billion) in spending cuts between 2015 and 2017 and a 30-billion-euro reduction in corporate payroll charges.

'Step in right direction'

"It was a move in the right direction. There is a growing awareness of the reality in France," the head of the MEDEF employers' union, Pierre Gattaz, told journalists.

In Germany, where there has been concern about the pace of reforms in France, Foreign Minister Frank-Walter Steinmeier commended Hollande's move.

"What the French president presented yesterday is, firstly, courageous," Steinmeier said.

European Commission spokesman Olivier Bailly said it was also "very happy" to see steps "in the right direction" and that Hollande's plans are "in line with recommendations we made last year".

Hollande, whose popularity has plummeted to record lows, is under intense pressure to revitalise the French economy and reduce an unemployment rate that is at a 15-year high.

'We can only support this process'

Citing Nordic countries as a model, he said his plans would allow France to boost growth while maintaining its much-cherished welfare state.

The centre-right UMP opposition was at pains to find fault with the plans, with former UMP finance minister Francois Baroin saying: "If this realisation is solid and serious, then objectively we can only support this process."

Even the rightwing newspaper Le Figaro, a normally severely critical of Hollande, said he had made the right noises, but it warned that "words will not be enough" for France's creditors and ratings agencies.

Many newspapers compared Hollande, some unfavourably, to the previous left wing leaders of other European countries.

'Francois Blair'

One left-wing newspaper Humanité even dubbed him "François Blair", in reference to the former Labour PM who was also accused of dragging his party to the right during his time in office.

Continuing the comparison an editorial piece in the Journal du Dimanche said: “François Hollande has undertaken his own social liberal turning point, if he rejects the phrase turning point and prefers the term “social democrat”.

"Soon to be called “Tony Hollande” or “Francois Schroëder”, signifying a blend of the only socialists who succeeded in reforming their country (Tony Blair at the end of the 1990s and Gerhard Schroeder in Germany at the beginning of the 200s) Even if there economic recovery programs were much more ambitious.

"One thing is certain, old-style socialism for Hollande is finished," the editorial added.

And economists, who have inthe past stuck the knife into Hollande and his economic policies expressed guarded optimism, with Christian Schulz of German bank Berenberg saying: "France's companies may be getting a much-needed boost…. 2014 could be a window of opportunity for Hollande."

Other economists rejected the idea that Hollande's speech was a lurch to the right.

'It's an enormous deception'

"This is not a radical change or a lurch to the right. These kind of reforms, reducing labour costs and cutting the deficit have already been discussed before by Hollande, perhaps he just made them clearer in Tuesday's announcements," Christophe Blot from the French Economic Observatory told The Local.

Blot said the benefits from these reforms may not come as soon as Hollande would hope.

"Businesses will certainly benefit from any cut in labour costs, but they will first concentrate on increasing their margins back to what they were before they start recruiting," he said. "

Perhaps in a sign of how far Hollande is veering away from his traditional Socialist roots those on the far left blasted him for carrying out the "most violent shift to the right in decades". 

"It's an enormous deception, we have never seen anything like it," Melenchon told RTL radio. "Hollande has adopted all the vocabulary of the right, the entire neo-liberal point of view."

Although the comparisons with Tony Blair and Gerhard Schroeder may well continue for some time to come when Hollande's reforms are pushed through parliament, the French head of state will not be likened to the two former European leaders when it comes to his private life.

Hollande still has a bit of work to do on that front.


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