Analysis: Hollande policy gaffes endanger French reform drive

Thu Jan 10, 2013 2:30pm EST
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By Catherine Bremer

PARIS (Reuters) - On the campaign trail, Francois Hollande pleased working-class voters with promises of a super-tax on millionaires and sought to reassure foreign investors with commitments to restore public finances and revive French industry.

But now as he starts 2013 and his eighth month as president, the Socialist's clumsy handling of those promises has turned the public mood against him, created the impression among many entrepreneurs that he is anti-business and prompted smirking foreign leaders to offer refuge to French tax exiles.

Although Hollande and his parliamentary allies can look forward to a four-year run before facing re-election, those policy and PR gaffes risk hobbling him just as he embarks on what could be the decisive phase of his five-year mandate, with plans to set in motion long talked about labor, welfare and pension reforms in the euro zone's second-largest economy.

Mass protests in the streets have thwarted French presidents before, as have economic pressure and lobbying by business.

"He is struggling to explain the general sense of what he is doing. He needs to find a central message that is simple, credible and sounds like it will bring people benefits," said veteran political communications consultant Denis Pingaud.

From the very beginning of his mandate, Hollande has had to walk a narrow political tight rope. Investors had long viewed him warily, especially since he declared a year ago that the "world of finance" was his enemy; meanwhile ordinary voters are impatient to see promised improvements in living standards.

His image among business leaders was tarnished after his election by a leftist minister who threatened to expropriate a steel plant in the northern town of Florange and tell its Indian owner, Lakshmi Mittal, that he was persona non grata in France.

"Florange was a public relations disaster," said a leading French industrialist who argues Hollande's main problem is persuading people he has a coherent, workable strategy:   Continued...

France's President Francois Hollande speaks at a news conference at the end of the first session of a two-day European Union (EU) leaders summit in Brussels October 19, 2012. REUTERS/Christian Hartmann