New French President Francois Hollande faces daunting tasks
PARIS — Francois Hollande campaigned for the French presidency with some pretty radical promises. But his carefully worded agenda and his political record suggest as president that he is likely to revert to the moderate consensus-building that has characterized his career. Here are some of the jobs he has to tackle as France’s new leader:
CHARM MERKEL: Hollande has a tough but crucial first meeting — going to Germany to meet with Chancellor Angela Merkel, who had endorsed his conservative rival and predecessor, Nicolas Sarkozy. Analysts say Hollande and Merkel will find some way to get along, because France and Germany see themselves as the twin pillars of the euro zone. Merkel and Sarkozy took a leading role in drafting a European fiscal treaty to curb government overspending, and she has staked out a firm position in favor of austerity. Hollande, the first Socialist to lead France since 1995, wants to renegotiate that treaty to inject a call for growth measures.
CHOOSING A PRIME MINISTER WHO IS AN ASSET: Within hours of being sworn in, Hollande named lawmaker Jean-Marc Ayrault his prime minister. Ayrault is a German speaker and former German teacher, which could help Hollande’s administration forge a good relationship with Berlin.
FREEZE GASOLINE PRICES: Public anger is flaring over gasoline prices nearing 2 euros per liter ($10.40 per gallon). During his campaign, Hollande promised to freeze prices for three months and suggested that oil companies and gas distributors will have to eat the losses from such a cap. As a longer-term solution, he wants a floating gas tax, so that as the price of gas rises, the tax rate falls. But some economists worry that could hurt government revenues too much.
HIKE TAXES ON THE RICH: Hollande’s most eye-catching campaign pledge was to make people making 1 million euros ($1.3 million) or more a year hand over 75 percent of that in income tax. Despite fears that wealthy people will flee to Britain or elsewhere, the returns from this tax are not expected to be huge.
LOWERING RETIREMENT AGE: Sarkozy fought with unions to raise the minimum retirement age from 60 to 62, a reform that may economists say is crucial to lowering France’s debts. Hollande had said he wants to revisit that, but he has quietly scaled back. Now he says he will lower the retirement age only for people who started work at 18 and paid into the pension system for the next 41 years straight.
QUIT AFGHANISTAN: Hollande has pledged to speed up the withdrawal of France’s 3,400 troops from Afghanistan, pulling them out by the end of 2012. But he recently acknowledged that a fast-track withdrawal might force the French to leave behind some military gear. Spain’s defense minister thinks Hollande won’t go through with the plan so as not to leave the allies high and dry. Some defense watchers say Hollande is likely to find himself some wiggle room, such as by pulling out all combat troops, but leave behind advisers.