- - Monday, April 16, 2012

BERLIN — The eurozone’s conservative leaders are bracing themselves as France, an economic giant, prepares to elect a Socialist amid their efforts to impose austerity measures to stanch Europe’s fiscal crisis.

Socialist candidate Francois Hollande’s election would “create a strong shock and a lot of turmoil in Brussels and in Berlin,” said Philippe Moreau-Defarges, a political scientist at the French Institute of International Relations in Paris.

President Nicolas Sarkozy holds a slight lead over Mr. Hollande in polls for the first round of voting Sunday, but the Socialist has commanded a significant lead over the conservative incumbent for the second round on May 6.

Mr. Hollande has promised to create public-sector jobs, increase taxes on the rich and “dominate” the financial sector.

That message has enthused French voters and caused concern beyond the borders.

“What many people [outside France] think but won’t say is that the French people are crazy,” Mr. Moreau-Defarges said, adding that the prevailing mood in Europe is against high public spending.

The eurozone is one of the biggest trading partners of the U.S., and disruptions in its economy have significant effects on the U.S. economy.

German Chancellor Angela Merkel threw her support behind Mr. Sarkozy’s re-election bid from the start, raising eyebrows with her offer to make joint public appearances with him.

Iain Begg, of the London School of Economics’ European Institute, described the move as “exceptional.”

Austerity vs. growth

“It is the political norm not to interfere in other countries’ elections,” Mr. Begg said. “It’s an indication of how apprehensive [Mrs. Merkel] is about a Hollande victory.”

That concern emerges from a fundamental divide between Germany’s doctrine of austerity, which has won the European argument and forced debt-ridden countries to tighten their belts, and Mr. Hollande’s commitment to boosting growth.

“There is a debate about the balance between growth and austerity,” said Ben Tonra, professor of international relations at University College Dublin. “The election of a Socialist French government would certainly and necessarily rebalance that discussion in a direction targeted at more growth and less austerity.”

Mr. Sarkozy politely refused Mrs. Merkel’s offer to hold his hand on the campaign trail, but the chancellor continued to show where her loyalties lie. She declined to meet the Socialist candidate - a snub repeated by British Prime Minister David Cameron and Spanish Prime Minister Mariano Rajoy.

Meanwhile, Mr. Hollande has threatened to shake things up in Europe if the French electorate gives him the chance. He has announced plans to renegotiate the fiscal treaty that will impose budgetary discipline from Brussels on the eurozone’s 25 member states that signed to it last month.

As the campaign has progressed, Mr. Hollande has toned down the fighting words, saying he would merely seek to add growth-stimulating measures to the treaty.

Yet many are wary of his appetite for meddling in the hard-won agreement.

“If you believe his rhetoric, he’s going to cause an unraveling of the fiscal compact,” said Mr. Begg. “You have to remember, something that has been so painfully put together, once you start pulling the threads, it’s not going to be easy to reweave.”

Still, campaign promises do not always translate into government policy.

Werner Weidenfeld, professor of political science at the University of Munich, predicts that, once in power, Mr. Hollande would be unlikely to push for renegotiation of the treaty.

Throughout recent history, he said, French and German leaders of different political stripes have always found common ground in order to take the lead in European politics.

“None of these tandems started out with perfect cooperation,” Mr. Weidenfeld said. “It was the same with Merkel and Sarkozy: At the beginning, there were a lot of misunderstandings and conflicts.”

That changed as Europe’s debt crisis grew: The two leaders became so close, they are known as “Merkozy.”

The Melenchon factor

Still, analysts say the immediate danger for Europe is not a potential rupture in Franco-German relations, or a real change in policy direction, but the reactions of volatile financial markets to even a whiff of increased public spending.

“France has relatively high debt. It has high unemployment, it has a relatively uncontrolled public-sector deficit, and if the markets start to smell a new actor coming into this taking risks, they will attack it,” Mr. Begg said. “And if the markets attack France, the eurozone as a whole is in [trouble].”

Some analysts say that, aside from the two main rivals for the French presidency, a third man in the race could pose a greater danger to European stability than his expected share of the vote might suggest.

“The most successful politician today is not Mr. Hollande; it is [Left Front candidate Jean-Luc] Melenchon,” said Mr. Moreau-Defarges. “He has made a breakthrough because he is talking about a new French revolution.”

Mr. Melenchon has split the left-wing vote with calls for an increase in the minimum wage, shorter working hours, a 100 percent tax on earnings above $474,00 and political control over the European Central Bank.

His proposals go far beyond the relatively modest plans of Mr. Hollande.

Polls indicate that Mr. Melenchon has the support of about 15 percent of the French electorate, which would knock him out in the first round of voting, leaving Mr. Hollande to go head-to-head against Mr. Sarkozy in the runoff vote.

If Mr. Hollande wins by a narrow margin with votes from Melenchon supporters, some say, Europe’s conservatives might have a real reason to worry.

“If [Mr. Melenchon] is seen as kingmaker, if he and his supporters are getting serious Cabinet posts in an administration headed by a President Hollande, then I think you see the prospect of something much more dramatic potentially happening,” Mr. Tonra said.

“Clearly, the agenda of Melenchon and his supporters is much more radical, much more antithetical to the entire thrust of where EU policy has been for the last couple of years. And that would set off fireworks.”

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