We continue our second installment of the French Election by taking a quick look at our 3 remaining candidates; next we will take a deeper look into their policies and how they could effect the markets.
Francois Fillon – Les Republicains Party
Francois Fillon studied law at Universite Paris Descartes; he is an economic liberal and social conservative who has served a role in government since his first election to parliament in 1981, reaching international status as the Prime Minister under Nicholas Sarkozy from 2007 until 2012.
“Total Rupture” is his strategy to bring France’s struggling economy back into the 21st century with an ambitious plan to cut €110 billion from the budget. He plans to achieve this by cutting 500,000 jobs in the civil service; which he will offset by scrapping the 35-hour work week, instead replacing it with a 39-hour work week for civil servants and a 48-hour work week for private industry. He also desires to cut levies on firms; tax cuts for households and to scrap France’s wealth tax called ISF, raising the VAT tax 2 percentage points to cover.
Fillon is the “establishment” candidate and was considered the front-runner until scandals involving alleged misappropriation of funds brought his campaign crashing down. Even with the scandals; Fillon is holding on to 19% of the vote and with any luck will be in the run-off with Le Pen.
Jean-Luc Melenchon – La France insoumise
Jean-Luc Melenchon is a 65 year-old former socialist Senator and is no stranger to politics. Starting with the Socialist party in the 1970’s; he was a Senator for many years and served as a junior minister from 2000-2002. Leaving the Socialist party in 2008 he launched the “Left Party” in 2012 and finished fourth in the Presidential race with 11.1% of the vote.
A hard left candidate; Melenchon desires to end nuclear energy in France and go on a spending spree. First stop is to renegotiate the 1992 Maastricht treaty; so that France can have a larger than 3% budget deficit, then utilize the new monetary flexibility by spending €1 Trillion on a recovery plan to stimulate the French economy. To help pay for the spending; taxes will be increased by 4 points; making France’s total tax weight 49% of GDP. He also desires to abolish the “presidential monarchy” and put an end to “austerity policies”.
“Indomitable France” is the slogan for Melenchon and he has gained the support of France’s Communist party; although a union with the Socialist party candidate Hamon quickly fell apart. Melenchon is a long shot to be in the run-off; he currently holds 17% of the vote.
Benoit Hamon – Parti Socialiste
Benoit Hamon; often referred to as “Little Ben” a nickname he received as an advisor to Martine Aubry from 1997 to 2000, has been in politics since his years as a student becoming head of the Young Socialist Movement. Graduating with a degree in History from University of Western Brittany Hamon worked for Lionel Jospin as an aid until his time under Martine Aubry. Hamon was the Education Minister in 2014; however, he quickly resigned the post in August siting Hollande’s right-wing pro-business turn on government.
Universal Basic Income; a payment to every citizen regardless of need, is the heart of Hamon’s bid for the Presidency. Among other labor measures; he wants to recognize “burnout” from work as an illness and introducing a tax on wealth created from robot labor. Sticking with leftist ideals he is also a supporter of legalizing cannabis and euthanasia. We are still waiting to see how he will balance the populist desires of introducing a new “citizens” Article 49.3; that would make a ban on the “burkini” very plausible, with his direct opposition to the ban.
If Hamon can succeed in winning over the Socialist electorate; he still may not garner enough support to defeat the National Front’s Marine Le Pen. His best chance of success is an already scuttled partnership with Jean-Luc Melenchon; Hamon is currently receiving only 9% of the vote and is not expected to be in the run-off.