THE POPULARITY of France’s socialist president Francois Hollande is in freefall after only five months in the job.
Mr Hollande, elected in May 2012, had a 59 per cent positive rating against 26 per cent negative in June. But his popularity has plummeted and on October 7, a poll conducted by OpinionWay for the French newspaper Metro gave him a 49 per cent negative rating and just 42 per cent positive.
Former president Nicolas Sarkozy enjoyed a 63 per cent popularity rating at the same stage five years ago.
The polls reflect disappointment on the political left and growing discontent on the right. The left reaction is due to austerity and less 'generous' measures than had been promised such as the increase in the minimum wage. The right is unhappy with Mr Hollande's anti-rich and anti-entrepreneur policies.
Unemployment and growth figures are also very disappointing. The threshold of three million 'Category A' unemployed – people without any job and looking for a job – was reached in September after 16 consecutive monthly increases.
This is 9 per cent up on September 2011 and the first time unemployment has reached three million since 1999.
Economic growth is just as bleak, according to the National Institute of Statistics and Economic Studies (INSEE). It says France will reach 0.2 per cent growth in 2012.
Growth for 2013, first projected at 1.2 per cent by the government in the summer, was lowered to 0.8 per cent in the September 28, 2012, budget. Most economists are forecasting growth at 0.3 per cent.
Mr Hollande's election campaign was based on a firm rejection of austerity and on a 'growth agenda'. However, his budget has all the attributes of a growth-killer austerity package.
The French renegotiation of the European treaty on fiscal discipline – a renegotiation that was supposed to include more growth measures – was ratified by the National Assembly on October 9. France is therefore pledged to reduce its deficit from 4.5 per cent of GDP to three per cent in 2013.
Austerity policies aiming to reduce deficits are supposed to be based essentially on government spending cuts. Such policies were absolutely necessary given France’s level of public spending – 56 per cent of GDP – and its fast-growing debt, at 90 per cent of GDP.
The level of tax pressure will rise from 44.9 per cent of GDP in 2012 to 46.3 per cent in 2013. Given the impact of this on labour costs, some analysts see this rise as incompatible with solving France's huge problem of being competitive especially compared with Germany.
The new income tax increases will hit 16 million of the 36 million tax households, according to a leading tax administration union, because tax schedules have been frozen.
Middle-class families paying income tax will also be hurt by a reduction in the amount of tax allowance they get for each child. A new tax on capital gains and savings will penalise savers.
But these spending cuts are a 'reduction in the increased spending previously projected' – not a real cut. Proposed government spending will actually increase from 368.6 billion euros in 2012 to 374.5 billion in 2013.
The Far Left in France are disappointed that Mr Hollande has rallied the austerity camp and ratified the European fiscal pact which they see as being imposed by Germany.
Mr Hollande chose austerity with more taxes and no reform in his first budget. A harsh recession in France is the likely outcome given the disincentives to wealth creation.