PARIS Feb 22 The French Socialists'
abstention in a parliamentary vote on Europe's future bailout
fund has provided new fodder for concern among EU-watchers about
how a possible left-wing presidential election victory would
affect the euro zone crisis.
The Socialist Party, whose candidate Francois Hollande leads
opinion polls for the April-May election, sat out Tuesday's
lower house vote to create a permanent European Stability
Mechanism (ESM) in protest at austerity policies in Europe.
President Nicolas Sarkozy's conservative government called
the move a "historic error" and berated the Socialists in
parliament on Wednesday. Even the left-leaning newspaper
Liberation was critical in an editorial.
"A vote today against the ESM is a vote against Europe, a
vote against the euro and a vote against European solidarity,
and it's not behaviour fitting to the gravity of the situation,"
government spokeswoman Valerie Pecresse said.
Prime Minister Francois Fillon accused the Socialists of
bringing election campaign tactics into parliament.
In a scolding comment, Liberation said left-wingers were
acting like ostriches. "Some of them quibbled, most found the
most pressing thing to do was not decide and others stepped up
their vindictive jibes," it said. "If the left wins power, it
needs to do better. And know what it wants."
The abstention, which did not prevent the bill passing in
the conservative-led National Assembly, was in line with
Hollande's campaign pledge to seek to amend an EU fiscal compact
agreed last month to add clauses on growth and investment.
While Hollande is staunchly pro-European and advocates
fiscal discipline, his stance raised questions about the
compatibility of his views with Germany's in resolving the euro
zone's sovereign debt crisis.
"I don't think this is a game changer. But it can be
interpreted as revealing a part of the Socialist platform - that
to be European we have to be very pro-growth - which is at odds
with the Germanic view on what solidarity means," said George
Magnus, senior economic advisor at UBS.
"If we see more instances like this in the run-up to the
election, they could be perceived as marking out a political and
negotiating position vis-a-vis Germany which would be seen as
quite different and potentially capable of causing uncertainty
about how the process would evolve."
The left objects to the fact that the creation of the ESM is
conditional on ratification of a fiscal compact treaty that
enforces austerity measures in countries with big deficits.
The ESM bill passed by 256 votes to 44, with 131
abstentions. Only the ruling UMP and centrists voted in favour.
"Austerity cannot be a condition of solidarity," said
Martine Aubry, the Socialist Party leader who is set for a key
ministerial post if Hollande wins power. "By this abstention we
state our refusal of austerity."
The Socialists' leader in the lower house, Jean-Marc
Ayrault, a Germanophile tipped for a government post if Hollande
wins, said the new EU treaty was incomplete.
"Bringing debt and deficits under control, yes, but without
investment mechanisms and deploying the ECB and euro bonds for
growth it would be a treaty that starts as a failure," he said.
The issue highlights differences between France's two main
political parties on how to tackle Europe's economic woes.
Hollande wants the EU treaty to stipulate that a certain
amount of spending should go into investment, education and
green energy. He also wants welfare clauses.
Those ideas would not necessarily jar with leaders in Italy
and other southern states, and German Chancellor Angela Merkel
has also begun to emphasise growth, although driven by
structural economic reforms rather than public spending.
But EU leaders, and financial markets, would frown heavily
on any attempt by Hollande to slow up the fiscal compact which
Sarkozy and Merkel put together in recent months.
Analysts say the Socialists' behaviour, such as Hollande's
recent lambasting of the financial sector, is more about keeping
left-wing voters on board than indicative of future policy.
"There would be issues with Hollande, but not unmanageable
ones," said Nomura analyst Alastair Newton in London. "The
reality once one gets behind the desk in government is always
slightly different to when one is on the stump campaigning."