After Sarkozy

Nothing unbecame Nicolas Sarkozy so much as the way he lost power. In the waning months of the French presidential campaign this spring, he turned his back on what he had long stood for. It wasn’t just that he courted voters of the Far Right. He also betrayed the cause he had come into office championing in 2007, when he promised to turn France into a “liberal” society. (In France, as in the rest of Europe, “liberal” means something like “pro-market”). Sarkozy had sold a substantial majority of French voters a bill of goods about what they could and should become: prosperity lay in following the “Anglo-Saxon” example of individualism and deregulation. He was frank about this: “An egalitarian society,” he famously said, “is the opposite of a society of responsibility and liberty.” This was the platform with which he soundly beat the Socialist Party candidate, Ségolène Royal, five years ago. But as Sarkozy began to implement his Anglo-Saxon model, with tax policies that favored the rich and an interventionist foreign policy, the French people had second thoughts. That sweet word “liberty” began to sound more like “privilege” when Sarkozy said it.

But the man had his moment—this is important to state, for people have suddenly forgotten how many of the French Sarkozy seduced. A leading sociologist, Emmanuel Todd, gets it wincingly right in his book After Democracy:

If, despite his vacuity, violence, and vulgarity, Nicolas Sarkozy existed as a social and historical phenomenon, we ought to admit that he did not arrive at the summit of the state despite these intellectual and moral deficiencies, but because of them. His downsides seduced us: his respect for the strong and his scorn for the weak; his love of money and his desire for inequality; his need to be aggressive and his constant willingness to take out after minorities—especially the poor ones in the suburbs, or in Muslim and Black African countries; the vertigo of his narcissism and the public display of his personal life, including even, implicitly, his sex life: all of his misbegotten needs in fact secretly attract[ed] most of French society, and if they did not represent its totality, they certainly showed what a state of crisis and anguish it [was] in.

As it happened, though, Sarkozy chose his moment badly. His business-friendly agenda barely got off the ground before it was knocked galley-west by an international economic crisis, which began with subprime mortgages and complex derivatives and went on, in Europe, to include sovereign debt. And so it was that in the last year of his unhappy presidency, Sarkozy desperately turned against his own liberal program. Placing himself at cross-purposes with many in his own party, the Union for a Popular Majority (UMP), Sarkozy began to distance himself from German Chancellor Angela Merkel, with whom he had championed fiscal austerity as the solution to Europe’s woes. He also went after immigrants, especially Muslim immigrants. So much for the open Anglo-Saxon model. By the end of his campaign for reelection, he had all but lost his soul by openly courting Marine Le Pen’s violently anti-European, anti-immigrant Front National. No UMP leader had done that before. But it was all in vain.

In the fifteen-hundred-year history of France, it would be hard to find a greater contrast to Sarkozy than the man who has replaced him: François Hollande. Apart from their intelligence and their age (both men are fifty-seven), the two have nothing in common. Hollande’s victory has been taken as evidence that slow and steady really does win the race. In an annus mirabilis of unbelievable work and a little luck, he went from being last on everyone’s list to head of state—and he did it his way. Hollande (the former partner of Ségolène Royal) has had to face more than his fair share of derision and disappointment over the course of his three-decade career in French politics, which began under the tutelage of the last Socialist Party president, François Mitterand. He is in some respects a kind of French Jimmy Carter: modest, honest, ordinary, maybe even a little boring. Like Carter when he was elected, Hollande has no foreign-policy experience. Like Carter, and unlike Sarkozy, he is a proponent of small-r republican solidarity. He arrived ad augusta (“on the heights”), per angusta—through a long ordeal of testing and self-testing.

Hollande’s persona turns on what he himself calls his “normalcy.” In truth, he is ordinary only in comparison to his predecessor. He does not flash a Rolex or take vacations on a billionaire friend’s yacht. Rather than raise his own salary by 172 percent, as Sarkozy did, Hollande has cut it—along with the salaries of all his ministers—by 30 percent. He has chosen not to live in the grand Elysée Palace, France’s White House; instead he will live with his companion, the journalist Valerie Trierweiler, in her apartment in the less chic 15th Arrondissement.

Hollande is a rassembleur, not a divider. He tells the French it is OK to love equality and social awareness more than success and money. He has promised not to stick his finger into every pie—Sarkozy was a notorious micromanager—and to let his prime minister, Jean-Marc Ayrault, do his job. Unlike Sarkozy and his wife Carla Bruni, Hollande prefers the company of the learned to that of the glamorous, and this too makes him a more normal French head of state. He is dignified in his choice of words; one would never hear him (as one heard Sarkozy) refer to the unruly poor of the banlieue as “scum,” or tell a naysayer in a crowd to “beat it, asshole!” or confess to a reporter, “I listen but I don’t pay attention.” It is hard to imagine him being accused (as was Sarkozy) of nepotism or sending his significant other off to foreign countries on projects of personal diplomacy. In sum, in the country where lèse-majesté was invented and faults of decorum go unpardoned, no one will have to tell Hollande, as a pundit told Sarkozy, “You can’t be invoking Charles de Gaulle while acting like Berlusconi.”

Hollande has his work cut out for him, and, with Europe facing its biggest economic crisis in decades, he doesn’t have much time to settle into the job. What he does have is a free hand. With the final round of the legislative elections on June 17, his Socialist Party and its left-wing allies amassed a solid governing majority in the Chamber of Deputies. The Socialists also control the Senate, the regional governments, and most of France’s principal cities.

The overwhelming economic problems they face are both domestic and international. In the opinion of a leading economist, Nicolas Baverez (who correctly predicted last October that France would lose its triple-A credit rating), the country is on its way to becoming “the new sick man of Europe.” Its economic growth rate currently near zero, France could soon tip back into recession. Then again, France’s economy has grown at a meager rate for twenty-five years, and it’s unlikely to climb back to levels of 4 to 6 percent in most people’s lifetimes, regardless of whether the euro is saved. The country hasn’t balanced its books since 1974; its deficit is currently 4.3 percent of GNP, its national debt €1.7 trillion. Unemployment is approaching 10 percent, and the trade deficit is €70 billion. French labor costs are uncompetitively high. The amount employers must withhold from wages for social programs is 46.8 percent in France, compared with 19.7 percent in Germany.

But, despite the fact that social expenditures are already causing enormous deficits, Hollande has promised to raise the minimum wage and invest in education. His new finance minister has announced that without further reductions in public spending the newly projected deficit will exceed the limit set by the European Union. Nevertheless, Hollande has promised EU officials in Brussels that France will stay below this limit without mandating new austerity measures. It’s far from clear how he plans to pull this rabbit out of a hat. No wonder another agency (Egan-Jones) has recently lowered France’s credit rating, predicting that the new president will be caught between his campaign promises and his commitment to Brussels.

Almost everyone in France is bracing for the hard times to come. Hollande’s most noteworthy change so far, increasing the tax rate to 75 percent for annual incomes above a million euros (about $1.25 million), is designed to spare the middle class. But such popular measures won’t be enough to solve France’s fiscal problems. What lies ahead is a painful and unavoidable renegotiation of the whole sacred social contract in France, and perhaps even a comparative decline in the French living standard. It will take years of painful readjustment to bring down France’s debt level, and the French are not wrong to worry about an even darker future emerging from the morass of unemployment, stagnation, and increased social inequalities left over from the Sarkozy era. On the other hand, Hollande is not simply promising painful retrenchment; he is also placing reasoned (though costly) bets on education and retraining, and, in a larger sense, on fashioning the kind of Nordic social democracy the French have often talked about but never had.

What may keep natural French pessimism from becoming the disunity and despair now felt in Greece, Italy, and Spain, however, is precisely the strong and dignified “normalcy” of the Republic’s seventh president. So far, at least, Hollande seems to have benefited from the historical luck that Sarkozy lacked. A few months ago the new president might have expected to find himself internationally isolated, facing strong opposition from Washington over France’s pending withdrawal from Afghanistan, or from Angela Merkel and the “smart money” advocates of austerity over his fiscal program. But times have changed in the month or so since Hollande took office. With the Greek crisis getting worse and Spain apparently headed in the same direction, Europe’s leaders are now more worried that the euro, and with it the European Union, may fall apart completely. Even the Germans now seem to understand that austerity policies, by themselves, may only make the situation worse. The EU cannot survive the crisis intact unless the economies of its member states begin to grow again, and it has become increasingly clear that they will not grow under the severe budgetary constraints imposed by Brussels. Despite its differences with Hollande over foreign policy, the White House had reason to be pleased with the outcome of the French elections. Whatever else it signified, Hollande’s narrow victory was seen by the Obama administration as a welcome public rejection of the kind of indiscriminate austerity programs that the Republican Party supports in the United States.

Hollande has put on the Keynesian mantle and taken up the mantra of “growth” as a necessary complement to Germany’s insistence on fiscal discipline: “There can be no growth without confidence, and no confidence without growth.”

Having agreed to mandatory deficit reduction in France, he is asking for European bonds to help finance new infrastructure projects. He also wants a new tax on financial transactions (something even Sarkozy favored), a stronger European Central Bank, and more coordination of fiscal policy within the EU. The unmistakable implication is that he is in favor of more Europe, not less—a position that takes some courage in a country disappointed, to say the least, with Brussels. (Hence the strong showing of the Front National in the first round of the presidential election.)

Hollande is a resilient pragmatist, not a charismatic visionary. His rhetoric tends to be as careful as his policies. True, during the campaign, he designated “international finance” as his chief adversary, but it is a measure of how little “international finance” actually believed him that his election had almost no effect on the market.

Still, there has been an unmistakable recalibration. Under Hollande, France will no longer fall dutifully into line behind the great German dreadnought, echoing Chancellor Merkel’s golden rule of austerity, as Sarkozy did for most of his term. It has become clear that the “New Deal” Hollande has promised for France also involves a new vision for the euro zone. He has not lashed out at David Cameron, Great Britain’s Conservative prime minister, or Merkel (though one of his ministers accused the Germans of “psycho-rigidity”) because he still hopes to steer them toward his own idea of what a revived European Union will entail. He will show steel against those (like the editors of the German newspaper Der Spiegel) who argue that Greece should be “encouraged” to leave the euro zone before its problems contaminate the rest of the continent. For Hollande, that would be a betrayal of the whole European project, as well as a dangerous capitulation to anti-EU extremists in Greece and elsewhere.

The euro crisis has set into high relief the degree to which—as the German philosopher Jürgen Habermas has put it—businessmen and the market place have styled themselves the shot-callers, to the detriment of ordinary citizens and democracy. Hollande refuses to be made a prisoner of the constantly invoked “harsh realities” of freewheeling capitalism, which are supposed to justify highly inegalitarian economic policies. He intends to speak and act in defense of other values—values less harsh but no less real. It had become customary in the press to refer to the mind-meld between Merkel and Sarkozy as the “Merkozy.” Some are now looking for a similar fusion between Hollande and Merkel; but, even if this does happen, it is still far from clear which of the two will be taking the lead. Would a Hollande-Merkel partnership be a “Homer,” a “Merlande,” or, less happily, a “Merde,” as the pessimists glumly assume?

Having to pass through a dark valley, the French are wise to have elected a leader who makes his appeal to his countrymen’s republican social values rather than to their disappointed economic ambitions. The late Tony Judt predicted that, at the beginning of the twenty-first century, the “chief task is not to imagine better worlds but rather to think how to prevent worse ones.” At such a moment, Hollande is a more credible leader than Sarkozy. He is no Mitterrand of 1981, set to inaugurate an era of radical Socialist reform, only to run into conservative economic and political force majeure (the rich took all their money out of France) and then reverse course. Hollande proposes a correction, not a revolution.

Notwithstanding the French economy’s high productivity or the fact that France has more Fortune 500 companies than any other European country and is a global leader in almost every economic sector, from insurance (Axa) to cosmetics (L’Oréal), the ordinary Frenchman is not obsessed with economic growth to the exclusion of all other social goods. Indeed, only about a third of the French agree that the free-market economy is the best system available (a proposition with which 60 to 70 percent of Americans, Brits, and even Chinese agree). The French just go on living with what some of us Anglo-Saxons see as a national contradiction, enjoying the wealth global capitalism has brought them while reserving the right to criticize and constrain this system according to values and traditions external to it.