Global Insight

July 7, 2013 5:54 pm

French far-right marches on as big parties falter

National Front’s surge adds to problems for mainstream parties
French construction materials group Saint-Gobain's CEO Pierre-Andre de Chalendar©Getty

Saint-Gobain CEO Pierre-Andre de Chalendar

Tensions between the socialist government of President François Hollande and the French business community boiled over in the heat of a Provençale summer on Sunday, just as former president Nicolas Sarkozy prepared to make an unscheduled reappearance on the political scene.

The two developments testify to what is an increasingly fraught atmosphere in France these days. As the government struggles to get to grips with a misfiring economy the mainstream political parties on both the left and the right are confronting a growing challenge from a populist far-right determined to take advantage of their travails.

At the normally sedate annual conference in Aix-en-Provence of France’s Cercle des Economistes , Pierre-André de Chalendar, chief executive of Saint Gobain, the glassmaker and building materials group, criticised what he called the “zigzag” policies of government.

Addressing a separate panel, Pierre Moscovici, the finance minister, shot back that Mr Chalendar’s analysis was “facile, inelegant and lacking in courage”.

But Mr Chalendar was reflecting a widely held frustration among France’s business leaders that Mr Hollande is taking too long to address vital structural reforms and has engendered uncertainty, especially on tax.

Mr Hollande makes much of a €20bn tax break introduced for companies to reduce their labour costs – launched in response to a call made at last year’s Aix conference for “shock” measures to address France’s declining competitiveness.

But for many companies, the tax credit only partially offset other big tax increases imposed since Mr Hollande ousted Mr Sarkozy 14 months ago. To rub in the criticism, the Cercle des Economistes in effect rejected the tax credit in its closing communiqué, calling for it to be replaced by direct cuts in France’s high social charges on employment – charges that make French labour costs among Europe’s highest.

The government’s popularity is no higher among the broader electorate than it is within business. It might, therefore, take some comfort in the troubles besetting Mr Sarkozy’s centre-right UMP party.

Last week, the constitutional council, the country’s top legal body, ruled that Mr Sarkozy had overshot spending limits on his 2012 election campaign and must pay back €11m in state subsidies, a hammer blow to the party’s already creaking finances.

The ruling has forced Mr Sarkozy at least temporarily out of his self-imposed political purdah. On Monday he will attend a UMP meeting to discuss the issue, his first such appearance since he lost the election.

The government’s popularity is no higher among the broader electorate than it is within business

Given his successor’s troubles, Mr Sarkozy is widely thought to be plotting a return in the next presidential election, in 2017.

“Of course he wants to return,” says a party insider. “But this has come too early. But he has no choice. He has to make sure the UMP sorts out its finances or it will resort to him personally as the candidate.”

Mr Sarkozy is not expected to return fully to the political frontline. But the episode has highlighted the weakness of the UMP, divided between those who want a rightward tilt to combat the far-right National Front and those who want to hold to the centre. Mr Sarkozy is by far the most popular figure among potential UMP candidates, though an Ifop poll on Sunday showed that only 40 per cent of voters wanted him to return.

“The problem for the party is that it has no leader and it lacks a policy line,” the insider said.

But this is of no great succour to the government.

Increasingly, the political hay in France is being made by the National Front, led by Marine le Pen. Her party has knocked the socialists into third place in recent by-elections and threatens to do serious damage both to them and to the UMP in next year’s municipal and European elections.

Mr Moscovici made this plain in Aix. The polls showing rising support for populist parties “make me afraid”, he said.

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