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If Francois Hollande Wins: What Chance for a Real Change of Direction in France and Europe?

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Francois Hollande, candidate of the French Socialist Party, is still the frontrunner in the French presidential elections. But he is untested in government. And in the midst of the euro crisis and the eurozone's commitments to binding austerity, what are the chances that a Hollande victory could represent a real change of direction in France and catalyse a real debate about social democratic alternatives in Europe? Or would President Hollande find his hands tied by decisions already taken?

Hollande is putting his central emphasis on youth and on justice. He is ruffling feathers in Brussels and Berlin by insisting that he will renegotiate the EU's newly agreed fiscal treaty - enshrining budget discipline and austerity into eurozone countries' national laws and constitutions - to put more emphasis on growth and employment. In a speech in London at the end of February, Hollande came back again and again to the challenge of youth unemployment across the EU: "Youth is the priority for all progressives in Europe" he declared, "We need solidary between generations, a contract of the generations."

But exactly how to tackle youth unemployment - and to promote growth in France and across the EU - is the big question. In Paris, Razzy Hammadi, a senior official in the Socialist Party, emphasises the twin themes of education and training on the one hand, and support for youth employment on the other. Hammadi emphasises Hollande's justice theme: "The most important issue is the question of justice - between rich and poor, on the fiscal front, in cities and tackling ghettoization, and most important of all justice for youth and a generational contract."

Current French president Nicolas Sarkozy is aiming to undercut Hollande in part by emphasising his lack of experience. "It is a very brutal campaign" says Pierre Haski, president of a leading French news site, Rue89http://www.rue89.com/, "the credibility of Hollande is a big issue and Sarkozy is playing hard on that." But at the same time, says Haski, the initial plan of Sarkozy to bring German Chancellor Angela Merkel onto the campaign trail with him - not least to emphasise Sarkozy's links to European leaders compared to Hollande - backfired a bit (and the plans were dropped). "If you copy Germany, you aren't being French, and though Merkel is impressive she is not an Obama figure with his charisma," says Haski.

Europe casts a long shadow on the campaign not only because of the eurozone crisis but also as the divisions and impact of France's 'no' vote in the 2005 referendum on the draft EU constitutional treaty are still felt throughout French politics. While both Hollande and Sarkozy are fairly mainstream pro-Europeans, both have senior figures around them in their campaigns who were in the 'no' camp. And while Hollande calls for renegotiating the fiscal treaty, Sarkozy is calling for a renegotiation of the Schengen border-free pact to help tackle illegal immigration - a deliberate tactic that appeals to both the anti-immigrant and anti-EU vote.

Leila Vignal, a socialist party supporter and assistant professor at the University of Rennes, says "It's a bit disappointing to see the old Brussels-bashing coming back." In her view, the divisions in 2005 over the constitutional treaty "nearly broke the Socialist Party". But the majority of the public in France are still pro-EU - only on the extreme right does Marine le Pen (amongst the presidential candidates) talk of leaving the euro - but pro-EU does not mean supportive of all EU policies and Europe's direction of travel.

In his first major European speech of the campaign on 17th March http://www.reuters.com/article/2012/03/17/france-election-europe-idUSL5E8EH08620120317, Hollande committed to renegotiate the fiscal treaty "for the good not just of France but the whole of Europe". He called for a change in the mandate of the European Central Bank to focus on stimulating growth, a financial transactions tax, and common European bonds to help finance a big programme of investment in infrastructure and sustainable energy. Sarkozy and the French right have criticised Hollande for his call to renegotiate the treaty, when a deal has just been done on it. Razzy Hammadi sums up the Socialist response: "The right says we can't renegotiate the treaty agreed just a few weeks ago but then they propose renegotiating Schengen which was agreed years ago."

While the Hollande wish to re-open the treaty is worrying the German government, the leader of the German Social-Democrats, Sigmar Gabriel, is doing his best to give as much support as possible to Hollande. In an interview with Le Monde on the day of Hollande's Europe speech - at a gathering of some of the EU's centre-left leaders in Paris - Gabriel insisted that: "It is absolutely not naïve [to call for a renegotiation]...the pact is only half the route that Europe must go... the [German] Social Democrats would add to the fiscal pact a growth and solidarity pact." And Gabriel goes on: "We need a second Marshall Plan for Europe especially to cut youth unemployment."

This raises a big and central question. Could a Hollande victory change the terms of the debate in Europe, catalyse a debate around a new set of social-democrat answers to the crisis, and possibly in doing so help to give momentum to the German Social-Democrats (currently flat-lining in German polls)? Pierre Haski thinks it is possible but also thinks there is a lack of vision underpinned by real policy substance: "If the Socialist Party has a new framework with other [European] socialists especially Germany, there could be a change of political landscape in Europe. My only concern is lack of vision, they see the historical opportunity but there is not a wealth of thinking...and the room for manoeuvre is so small especially in budget terms."

It's a concern highlighted by the three page statement http://www.jean-jaures.org/Manifestations/Les-rencontres/RENAISSANCE-POUR-L-EUROPE put out after the centre-left Paris meeting on the 17th March by the think tanks who organised the event. Titled "Growth, solidarity, democracy: setting a new course for Europe" there are broad calls for more investment and action to create employment but there is a real lack of detail. The statement calls for industrial policy to be "reshaped" but offers no sense of how this might happen. And there is an understandable nervousness not to upset the financial markets: "budget responsibility and fiscal discipline are key..." the statement insists.

The big surprise of the presidential campaign so far has been the performance of the Leftist Front candidate Jean-Luc Mélenchon. While support for the Greens has collapsed, Mélenchon has surged into double figures in the polls and is vying for third place in the first round with Marine le Pen, both around 13-14% in recent polls. This puts pressure on Hollande from the left, and may just give Sarkozy an edge in the first round - but Hollande for now remains 8 to 10 percentage points in the lead in the polls for the decisive second round.

If Hollande wins, all eyes will be on how he takes forward his commitment to renegotiate the fiscal treaty. While it only needs ratification by 12 of the signatory countries for it to come into effect, it's hard to imagine the treaty going ahead - and having any chance of contributing to calming financial markets - without France firmly committed. But Brussels eurocrats are expert at cutting the sort of deal that can create compromises even once the ink is supposedly already dry.

Whether that deal might be a growth protocol to the fiscal treaty or a parallel compact on growth and employment may not be the most important question. The toughest question is whether substantive new policies, with serious new funding behind them, will see the light of day. Or will there just be more warm words on growth but no serious change of direction?

In the late 1990s, France pushed successfully in the EU for a European Employment Strategy. It established worthy goals, undertook lots of 'best practice' comparisons of employment policies across the member states, but had no teeth and little impact.

A revival of the European left's fortunes at this time of European crisis will require something much more serious than that. Can Hollande - with the other European social democratic and socialist parties - deliver real policy content and drive it through into European policies? On that, the jury for now is firmly out.