Hollande One Year On: French-Bashing and 'Communism'
Jenny Cosgrave, Staff Writer
Published 3:26 AM ET Mon, 6 May 2013 Updated 1:29 AM ET Wed, 8 May 2013 CNBC.com
French President Francois Hollande
After one year in office, no French president has been as unpopular as Francois Hollande. Unemployment reached an all-time high last month and public debt is set to hit 94 percent of gross domestic product (GDP) this year.
Growth is shrinking and France expects its economy to expand by 0.1 percent this year, but the European Commission forecasts a 0.1 percent contraction.
According to analysts, this should not come as a surprise.
(Read More: France Says It Is Not Anti-Business)
"Hollande has just implemented the decisions that were in his electoral platform and they were all wrong in terms of what could be positive for the French economy, "said chief economist of Axa Group, Eric Chaney.
"The first decisions that were taken were taxes on labor, on capital, on capital gains, everything that is creating value in the economy – so it should not be a surprise that the economy is not doing well," he added.
France is definitely in recession, after three out of four negative quarters, said Chaney. Labor reforms must be put in place to reduce the 10.5 percent unemployment, he said.
(Read More: 'Time is Running Out,' Asset Manager Tells Hollande)
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We Are Not Communists: French Lawmaker 3:26 AM ET Mon, 6 May 2013
Karine Berger, a member of France's finance commission and of Hollande's ruling socialist party defended the government's track record, saying the government was bringing down the state's public expenses and that it was committed to bringing down its budget deficit.
"It's nonsense to run towards a 3 percent (deficit) target if growth is decreasing at the same time…My view is that we are going to be very close to the 3 percent at the end of this year," she said.
She said the government was not as left-leaning as it was often portrayed in English-speaking media and argued it was perhaps under fire more than others because it was the only truly labor-focused government in Europe.
"We are not communists…We are a "Labour-like" government," she said. "We are company-friendly, business friendly, market-friendly, but we are also very involved in social justice and equality," she said.
(Read More: France Faces 'Devastating Scandal' as Economy Stalls)
The lack of investment and incentives for businesses has also hit France during Hollande's first year as president, said Ludovoic Subran, chief economist and director for economic research at Euler Hermes.
"We have no investment in the economy, how do you want the economy to grow? You need to incentivize businesses into investing into France which is not happening right now," said Subran.
"We need a confidence shock, we have had the fiscal shock but we have not had the confidence shock. The recovery behind the U.S. is also deeply linked to this confidence shock. Consumers in the U.S. continue to consume, whereas in France we decelerated," he added.
Meanwhile German- French relations, which are at the core of the European construction, are not in good shape. Recent media reports on a leaked internal briefing from German Chancellor Angela Merkel's coalition partners which labeled France "Europe's problem child" have further complicated the relationship between the two countries.
Prominent opposition UMP member Bruno Le Maire told CNBC that there were two reasons for the rift, "the first being the bad economic results out of France,which need to improve to rebuild the trust between the French and German government".
"The second reason is the lack of common vision between France and Germany about the future of Europe," he said.
—By CNBC's Jenny Cosgrave;.Follow her on Twitter @jenny_cosgrave.
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