Left Landslide In French Polls May Block Eu Single Currency Plan
French voters swept the Socialist to power on Sunday in a vote that sent shock waves through financial markets and spelled big trouble for Europes planned single currency.
The outcome, called a worst-case scenario by economists, gave the Socialists and their allies an absolute majority of at least 289 seats. It was not yet clear whether the non-Communist Left would achieve an absolute majority on its own without the Communist Party.
The result was a disaster for Conservative President Jacques Chirac who called the snap vote 10 months early and now will be forced to share power with a unfriendly Left wing administration.
Chirac named Socialist leader Lionel Jospin as Prime Minister yesterday, replacing conservative Alain Juppe, whose deep unpopularity among voters was blamed partly for the Centre-Rights defeat.
Under the French constitution, the Prime Minister shares power with the President.
Until a few weeks ago, political analysts gave the Socialists little chance of snatching power from the Conservatives.
Addressing jubilant supporters, Jospin said the vote was a demand for an economic and social policy put at the service of man.
Jospins campaign was focused on a pledge to create 700,000 jobs, half of them in a public sector, in an effort to bring down Frances record 12.8 percent unemployment.
He has said he supports the drive for monetary union but has pledged not to introduce any further belt-tightening to ensure that France meets the strict conditions for taking part.
The xenophobic National Front which wants to send home millions of immigrants and had hoped for a breakthrough in the election won just one seat despite capturing 15 per cent of the vote. The ecologically minded Green party won an unprecedented seven seats.
With 522 seats declared, the Socialist Party had 229, Radical Socialists and other Left 27, and the Centre-Right had 232 seats. The Communists won 38 seats, up from their tally of 24 seats in the previous Parliament.
The French stock marked dived more than two per cent on the results, bringing its total losses since when a Socialist win looked likely to nine per cent.
The franc lost ground against all currencies, especially the dollar.
Juppe, who was viewed by voters as a cold technocrat, said after losing, We did not manage to convince the French people that we were going in the right direction.
The message passed by voters is that they do not want any more belt-tightening or job insecurity, said economist Paul Horne of Smith Barney in Paris. They have drawn a new Maginot line around their jobs and perks.
The snap election had raised fears among voters that the government was planning a new round of austerity to enable France to qualify for monetary union.
The Conservatives, who had a crushing 464 seat majority in the last Parliament, lost nearly half their seats in Sundays bloodbath.
Opinion polls had forecast a tight race after the first round of elections one week ago in which the Socialists scored convincingly.