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With 3 days to the first round of France’s presidential poll, let’s have a look at the campaigns and the way it reflects the worrying situation of the country.

On April 22nd, France goes to the polls to elect a new President. The second round will take place on May 6th.

Nicolas Sarkozy has now opened up a small 1 percentage point lead in the first round polling over François Hollande, his Socialist rival. But the key question is who will win the second round and the polling is clear: François Hollande is 9 percentage points ahead of Nicolas Sarkozy.

Yet, French voters who aren’t ardent partisans remain disillusioned and will vote for a candidate because they despise the other camp. The German magazine Der Spiegel sums it up by saying that “the French have the choice between a man they no longer want and a man they don’t really want”.

Hollande and Sarkozy: same difference

When it comes to the two candidates who are likely to be elected, the truth is that France faces a choice between two statists. Both favour a command-and-control economy, moderated protectionism, entrenched entitlements and deeper European integration.

François Hollande, a former civil servant and candidate of the Socialist Party, the largest centre-left party, is polling at 26.5%. He is hoping to become the first Socialist president since his mentor François Mitterrand won re-election in 1988.

He ran the party for 11 years but likes to cultivate the image of an average Frenchman, implicitly contrasting himself with the mercurial Nicolas Sarkozy.

Holland’s platform is largely old-school socialist, calling for a punitive 75% marginal tax rate on incomes above €1 million a year, a more generous minimum wage and for a return to retirement at 60 for those who have worked for long enough. He wants to create 150,000 subsidised jobs for young people in difficult neighbourhoods, 60,000 new jobs in the national education and justice systems and 5,000 in the police. He promises to reduce the share of nuclear power in the national energy mix from 75% to 50% by 2025.

This additional spending of €20 billion will be financed by tax increases. But he insists he will bring France’s deficit down. To return to a zero deficit in 2017, he believes the state must find €100 billion: 50 from savings and 50 from new tax revenues.

Nicolas Sarkozy, a former lawyer, current President of the French Republic and candidate of the centre-right, Gaullist, pro-national independence and dirigiste Union for a Popular Movement is polling at 27.5%. He came to power in 2007 promising voters a break with the ways of the past.

But it didn’t take long for his personal behaviour – cavorting with millionaires, exposing his private life – to antagonise the French. He struggled to earn political credit for his hyperactive efforts during the global financial crisis, and his approval ratings today are lower than for any fifth-republic president ahead of a re-election bid.

His list of achievements is less than stellar. Sarkozy pushed through a university reform and, in teeth of huge demonstrations, a raise to the minimum retirement age. Others were operated more quietly, as the tax credit for research, encouraging business development. Many other projects were announced and then abandoned. The hope of a revival, present in 2007, hasn’t been satisfied.

Sarkozy promises an increase of 30% in building rights, a decrease of labour costs for low wages, young and old professionals. He wants to establish a minimum corporate tax for large companies and broaden the tax on financial transactions. To control public spending, his only plan is to continue the current policy of replacing two retiring civil servants by one. To finance his promises and balance the public budget by 2016, the state would have to find €53.5 billion, one quarter coming from tax increases, three quarters from spending cuts.

The French state remains one of the biggest spenders in Europe, and Sarkozy has never faced up to the need to rethink the underlying social model. His more recent protectionist rhetoric has enabled him to close in on Hollande in first-round polls.

But Hollande and Sarkozy aren’t the only candidates in the race.

Ten flavours of statism

Eight other candidates have obtained the requisite 500 signatures from elected officials needed to run for President. Moreover, TV stations are legally required to give them equal airtime.

The hard-left is well represented by three candidates. Singing the praises of the dictatorship of the proletariat, Nathalie Arthaud, a former professor of economics and management who is the candidate of a Trotskyist party called Workers’ Struggle is currently polling at 0.5%; At 1%, we find Philippe Poutou, a labourer and labour union leader, the candidate of the New Anticapitalist Party, another Trotskyist organisation. Poutou is likely to pick up the sympathy vote. His irreverent campaign uses the election to air his party’s views: a national retirement age of 60, a wage increase of €300 a month for all, a minimum monthly wage of €1,700, a 32-hour working week, requisition of the banks and an end to nuclear power.

Polling at 13.5% we find the rising star of the hard-left, Jean-Luc Mélanchon, a former senator and candidate of the doctrinaire Left Front, a de facto rebranding operation of the French Communist Party. To sum-up, Mélanchon is all about contempt, bitterness and autocratic reflexes.

Mélanchon calls for a 20% rise in the minimum wage, and for income above €360,000 to be confiscated via a 100% tax. He wants to establish a 100% reimbursement of health expenses by the state, to create 60,000 jobs in national education and increase funding for public research, culture, sports, etc. He promises to nationalize electricity, nuclear and oil companies, now de facto controlled by the state.

When it comes to public finances, Mélanchon sets no date of return to equilibrium and claims, he simply doesn’t care. To fund his program, he wants to increase taxes on the rich, on capital income and social charges on low wages.

A talented orator, he has an earthy appeal, in contrast to the choreographed campaigns of Sarkozy and Hollande. His success has forced Hollande to tack to the left in the first-round campaign.

The Greens, a progressive, socialist and ecologist party, is also represented in this campaign. But its candidate, Eva Joly, a Norwegian-born magistrate has failed to steer the public debate on corruption and environment issues. She painfully hobbles at 3%.

A perennial also-ran in French presidential elections, François Bayrou, a former teacher, likes to present himself as the sensible centrist alternative to the candidates from the mainstream left and right.

His party, the Democratic Movement, urges fiscal restraint (but doesn’t say how), says France must do more to encourage entrepreneurship (but doesn’t detail this), and adopts a liberal tone on social issues like gay rights (but is unclear about it). His ideas on healthcare, pensions and unemployment are encouraging.

He would be an OK candidate for the libertarian vote if he wasn’t also advocating for a long list of statist measures: the centrepiece of his program is to revive the “made in France”; he wants to create a “bureau for national strategies” and he wants the state to identify key industrial sectors that will be funded by EU subsidies. He also pushes to raise VAT by 2 points in 2 years and create two new tranches of marginal income tax, 45 and 50%.

France would need €100 billion to finance his reforms and bring the country to a zero deficit by 2016; 50% of it would come through spending cuts and 50% through new taxes.

As Nicolas Sarkozy and François Hollande are dragged to their respective extremes by other candidates, there ought to be space for him to thrive in the centre. In 2007 that approach saw him win a respectable third place. But after a brief polling surge late last year, he has struggled to turn himself into a credible alternative: he is currently polling at 10.5%.

Nicolas Dupont-Aignan, a civil servant and candidate of a right-wing, souverainist, protectionist party called Arise the Republic, is polling at 1.5%.

The hard-right is represented with Marine Le Pen, a former lawyer, candidate of the National Front, a nationalist, social conservative, anti-globalization, Eurosceptic, protectionist party is polling at 16%.

Marine has rejuvenated the party founded by her father, Jean-Marie. Where he thundered over losing Algeria and dismissed the gas chambers as a “detail of history”, she has warned of the dangers of Islamification and untrammelled immigration, and calls for France to leave the Eurozone. It has worked, up to a point.

Marine Le Pen wants France to leave the Eurozone, create an international tax on financial transactions, increase wages by €200 per month, and create an income for parental education. She also wants a more generous pension system, to increase VAT and income tax, eliminate loopholes and inefficient taxes.

After she took over the party leadership in January 2011 her poll ratings soared. Yet her support has flatlined since then, and Sarkozy has aimed to suck away some of her backers by taking a harsh line on immigration and law and order. She now looks far less likely to make it into the second round, as her father did in 2002.

Jacques Cheminade, a former civil servant, candidate of the Solidarity and Progress party, representing the difficult to classify Lyndon LaRouche movement in France, is polling slightly over 0%. Among other things, he compares Barack Obama to Adolf Hitler, is advocating for the colonization of Mars and would like the state to promote choral singing.

Where are the libertarians?

La Boétie, Turgot, La Fayette, Constant, Bastiat, Tocqueville and Aron: France is the homeland of well-known classical liberal and libertarian thinkers and political figures since the Renaissance.

Yet, the French bourgeoisie has always seen the centralized State as a tool to crush the power of the privileged nobility. This historical setting and its legacy has generated huge constraints on the classical liberal movement in its struggle to accommodate its principles to the French culture. Even if a few classical liberal reformists can be seen as actors during the 18th th and 19th century, they have been observers since the 20th.

France is alos a country where anti-libertarian ideologies are very present in public opinion, specifically in some key sectors like national education, civil service, labour unions and political representation. Any reform of the state is felt as an attack on the country’s identity.

To sum-up, French people use the word “libéral” as an insult, preferring to add prefixes like neo- or ultra- to it. The word “fascist” is easily dropped to describe it. “Libéral” stands for Madoff, nouveau riche, politically connected big business, CEOs who love to fire employees and outsource their plants, worldwide police state and having great pleasure in seeing African children starve to death.

Giving this toxic intellectual environment, you would expect classical liberals and libertarians to escape the country or hole up somewhere. Well, many don’t.

Two presidential elections ago, in 2002, Alain Madelin, a former minister and the candidate of Liberal Democracy, a short-lived French classical liberal party, reached 3.91% (1.1 million votes) in the first round of the poll at the end of a treasons-packed electoral campaign.

The existing classical liberal Liberal Democratic Party doesn’t have a candidate in the presidential election this year. Its board has chosen to focus on the coming legislative elections on June 10th and 17th 2012.

With no candidate to promote their views, a group of libertarian activists has started a mock campaign called Bastiat 2012. The 19th century French economist and prolific pamphleteer, well known in the US but ignored in his own country, can be seen on posters, flyers and videos in the street and on the Internet.

François Lenglet, a resolute business journalist from a cable TV channel called BFM, is the only critical journalist around when it comes to public finances. During prime time interviews, he explained with graphs to all of the candidates how insane their economic plans were. Far from opening their eyes, most of the pretenders felt offended.

France has its share of liberty-oriented think tanks (iFRAP, IREF and IEM among others), media (from the venerable review Commentaire to the pure-player Contrepoints) but most of them are run by volunteers or are financially struggling.

What France really lacks are grassroots movements like campus groups, an uneasy challenge in a country where libertarians are a scattered minority – called insane at best, dangerous at worst.

A fear of decline and a vague yearning for renewal

The pessimistic talk about French decay is blooming. With good reasons, the country is presented as crushed under a mountain of public debt, a loss of competitiveness, a jammed democratic system and a defiant society.

France remains the fifth largest economy worldwide, but several indicators are flashing.

France has the highest public spending ratio of the Eurozone: 57% of its economic output depends on life support from the state.

In 2011, the public deficit reached €103 billion, the public debt €1.7 trillion, or 85.8% of the GDP. This peak does not stem only from the financial and economic crisis. It is the heritage of a 30-year inability to control public finances: the country hasn’t had a balanced budget since 1974.

The country has already lost its triple-A credit rating from Standard & Poor’s and, although its situation is not comparable with that of Greece or Spain, rising interest rates on its sovereign bonds would exacerbate the euro crisis.

Cooked governmental figures say that the unemployment rate reaches 10%. An entire generation of children of immigrants are growing up in ghetto-like suburbs where they have no contact with the labour market. Plant closures and spurs of social revolt are increasing.

So far, little has been said about the worrying situation of the country during the election campaign. Finding a way to save €100 billion is becoming an urgent priority but none of the candidates is signposting a way to cut public spending and liberalize housing, healthcare, pension, transports, retail, education, energy or banking.

Hollande actually wants to spend more and raise taxes; Sarkozy has missed the opportunity to make cutbacks over the past five years in office. Inward and backward looking, the competing political figures are lacking bold new ideas.

Execrated globalization

To this economic decline one must add a profound loss of self-confidence. This sentiment is reflected in particular by a violent rejection of the global economy. The French see globalization as a calamity that came from elsewhere. The concept of “de-globalization” is surging in the polls and the Left is not alone in criticizing outsourcing. From François Bayrou to Marine Le Pen and from cliché reservations to fiery rhetoric and pledges, the broad right-wing spectrum is also against globalization.

The French anxiety is also apparent in the political discourse on immigration. “There are too many foreigners in France,” Nicolas Sarkozy recently said, adding: “How could we integrate and assimilate foreigners, if an uncontrolled wave of immigration comes indefinitely to frustrate the efforts of the Republic?”

Fear of Islamization of the country is expressed through the burqa ban, debates about prayers in the streets, mosques building or halal meat. To many, communitarianism is now developing to the point of destroying the foundations of the Republic.

This debate illustrates confusion about national identity. It also shows nostalgia for a paradise lost: “When talking about the problems of immigration, […] it creates the idea that if there were no immigrants and their children, we would return to a Golden Age” estimated Franco-Norwegian Eva Joly, the Green candidate.

No one seems to understand that the issues the country is now facing – closed society, hierarchical in the extreme and mired in a culture of conflict of interest, unemployment, broken social ladder, economic sclerosis, state corporatism, inequalities in education, social apathy or violence, generalized distrust – are the consequence of an interventionist state penalising success, crushing civil society, dynamism and innovation. This system wasn’t designed by today’s immigrants but by French-born electors in the 1950s and kept until now.

The French are also more depressive, take more medication (and not just because Social Security is more generous than elsewhere), commit suicide more often than in countries with comparable income levels. Yes, the French are moaners, but that’s because they feel a deep unease to live together.

Democracy in crisis

Something else is at work in the political field, undermining reformist elks and precluding optimism. Half of French people no longer feel represented by politicians. They think that all parties from right to left don’t care about their problems.

These invisible French are shunning the ballot boxes. This has resulted in record low turnout in recent elections: 60% in the 2009 European elections, 53.7% in the 2010 regional ballot. One expects a record high abstention level of 30% in the coming presidential elections, a clear rise from 16-20% in the last two presidential elections.

This gives cold sweats to the main candidates’ campaign team. Abstention rate is likely to be the highest in the following segments of the population: voters under 35, labourers (54% say they won’t vote), residents of rural communities and hard-left, -right supporters.

This crisis of representative democracy is coupled with a loss of confidence in political efficacy. The French believe less and less that their leaders have the power to act. The political failure to support purchasing power, reduce unemployment, and boost growth in the wake of the financial crisis has strengthened this opinion.

Distrust of politicians is an old French trait. But it found great opportunities to express itself during the last five years, with the revelation of multiple corruption and misbehaviour scandals where governing left and right-wing parties were heavily implicated (Woerth-Bettencourt, Karachi, Strauss-Kahn or Guérin).

France is a country that does not renew itself. It is the same old ideas, the same old parties, and the same rotten debates. The French are deeply dissatisfied with the way political issues are dealt with. The civil society has taken good note of today’s fundamental transformations but the political world is still alien to it.

No matter who becomes President on May 6th will be forced to tackle the public deficit issue. Bond markets will be more watchful than French voters.  If elected, Hollande would need to discard some of his promises and would experience the negotiation power of Chancellor Angela Merkel when it comes to budgetary discipline; Sarkozy would be under the obligation to find new budget savings.

In both cases, the consequence will be a sharp surprise and a sudden blow to the people.

Published on 24hgold.com, on 2 May 2012.

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