François Hollande, favourite in French presidential race, has strengthened its stance against the financial sector. He recently declared a ‘war on finance’ which received wide media coverage in the UK.
However, does Hollande’s discourse differ from the ones by other leaders in the aftermath of the financial crisis? Will the candidate whose supposedly ‘soft’ personality has earned him the nick-name “the pillow” in French political circles really translate this rhetoric into tangible action? Should the City be worried?
On Thursday 26 January, the French socialist candidate published his long-awaited programme consisting of a 60 point manifesto. The document contains tough elements on financial regulation. François Hollande plans to push for an increase of 15% in taxes on banks’ profits; forbid stock options except for start ups; and ban banks operating in tax heavens. In addition, the creation of a European credit rating agency is top of his agenda.
François Hollande also says that he would force banks to separate their retail activities from their investment arms. Last but not least, the socialist candidate wants to put an end to “toxic products which profit speculators and threaten the real economy”. How he will do that is still unclear…
The most striking aspect of his programme is his plan to renegotiate the new Eurozone fiscal compact, which was discussed by Heads of State in Brussels only yesterday . The socialist candidate is also on record expressing an appetite to amend the Market in Financial Instruments Directive (MiFID) even though the current review is already well under way.
Hollande is trying desperately to position himself as a knight on a crusade against the bankers, and a true socialist proposing real change. However, despite the rhetoric, as The Economist stated : “There is still no convincing answer to the mystery of what Mr Hollande would do if elected”.
In reality the only crusade François Hollande is launching is against Nicolas Sarkozy, whose name he still refuses to mention in each of his official speeches.
At the end of February François Hollande is expected to meet with UK Labour leader Ed Miliband in London and reassure the City about his intentions. Whether he will succeed remains to be seen.