It's not the economy, stupid

Hollande is in worse position than French economy

President Francois Hollande is in a more parlous position than the French economy. While unemployment is at a record high of 3.591 million, consumption is holding up well and growth may turn out to be stronger than private sector economists had previously anticipated. But missteps are making Hollande and his ruling centre-left Socialists increasingly vulnerable before the 2017 presidential elections.

First, protests and strikes forced the government to start watering down flagship reforms that were supposed to inject new dynamism into the labour market. This has satisfied neither employers nor those opposed to the reforms. Then on March 30, Hollande had to drop plans to strip French nationality from people convicted of terrorism, a policy he espoused after November attacks in Paris killed 130 people. The Senate, which is controlled by the centre-right Les Republicains party, passed a different version of the proposal rather than exactly the same one as the lower house, which is what was required.

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There are common threads. Hollande misjudged the scale of resistance to both policies from some of his own lawmakers and traditional Socialist supporters. Worse still, he and his government botched communications to the country at large, particularly in the case of labour reforms. Listening to key partners and forging a consensus early enough before rushing to make firm proposals would have helped on both issues.

The result is Hollande looks increasingly unlikely to be able to win re-election. A poll published on March 30 showed he would come third in the first round of the presidential election, behind the far-right National Front's Marine Le Pen and Les Republicains' Nicolas Sarkozy. Hollande could of course step - or be pushed - aside. But this won't solve the Socialists' problem. They need someone left-leaning enough to win any party primary but open enough to change to win national backing. Prime Minister Manuel Valls and Economy Minister Emmanuel Macron have both espoused reform and are more popular nationally than Hollande, but provoke a visceral reaction among some Socialists.

Political uncertainty is unlikely to slam the brakes on French growth. But infighting in the ruling party and policy stasis are hardly a recipe for greater economic dynamism.