Do the first results of France’s presidential election represent a threat to the Eurozone?


Vincenzo Scarpetta

Almost one third of votes went to candidates who are explicitly anti-euro (Marine Le Pen), or anti-austerity and protectionist (Jean-Luc Mélenchon). Irrespective of the outcome of the second round, it’ll be hard for the next President to convince France to follow a German vision of the Eurozone – sound money and strict supranational budget rules. A victory for François Hollande could complicate France’s relationship with Berlin, notably over the fiscal pact, which he questions, or the role of the ECB, which he wants to print money. This would undermine the entire German approach to the crisis (German money in return for Prussian budget discipline). While the Franco-German axis remains strong, this will add even more political uncertainty to the Eurozone crisis. A back-pedalling France would make it more difficult for Angela Merkel to get political cover for putting German money on the line. Markets may grow more anxious.
Vincenzo Scarpetta is a researcher at Open Europe.


Emma Reynolds

A victory by Francois Hollande would fundamentally change the terms of the debate in Europe. Europe has been dominated by the centre-right and its exclusive focus on austerity. The greater threat to the Eurozone and the British economy would come through maintaining the status quo. As Standard and Poor’s has recently emphasised, austerity alone is self-defeating. Europe’s centre-right governments have dragged their feet in tackling the Eurozone crisis. They have spectacularly mismanaged the situation by imposing crippling austerity on the weakest economies and failing to address the unemployment crisis facing one in ten people. Hollande doesn’t want to rip up the fiscal compact but recalibrate it to include a commitment to jobs and growth. Far from being a threat, this is the resuscitation the Eurozone desperately needs.

Emma Reynolds is shadow Europe minister and Labour MP for Wolverhampton North East.