Hollande Seeks to Overcome Doubts in Fight Against Sarkozy

Francois Hollande began his march toward the pinnacle of French power in Lorient, a Breton port, three years ago. On June 27, 2009, he told 400 Socialist Party activists they needed to unite to oust Nicolas Sarkozy.

It was the first of his almost 500 events in France’s longest-ever campaign to make voters forget he was nicknamed for a pudding brand and get them to see him as a credible challenger to the most unpopular post-World War II president.

Along the way, Hollande, 57, has had to fight doubts over his own leadership ability, rifts among Socialist factions, the legacy of humiliating defeats on his watch as party chief in 2007 and 2002, and the shadow cast by Dominique Strauss-Kahn, the favorite to run this year until his 2011 arrest in New York.

“Hollande has been misjudged by party colleagues,” Jean- Pierre Jouyet, chief of France’s financial-markets regulator and a friend since their military training in 1977, said in an April 16 interview. “I spent the two summers with him after he made his decision to be a candidate and while others took the nomination for granted, he was getting ready.”

Polls show Hollande’s determination may pay off as Sarkozy struggles to overcome the highest joblessness in 12 years and a disapproval rating that reached 64 percent in an Ifop poll published April 15. The Socialist has led every survey since May 2011 and is extending his advantage in the days before the April 22 first round. Hollande’s lead for the May 6 runoff grew to 58 percent to 42 percent in a CSA poll published today. That compares to a 14 point lead last week.

A native of Rouen, the Norman city where Joan of Arc was burned at the stake by the English in the 15th century, Hollande has spent his career mainly behind the scenes.

‘Normal’

He began in 1981 as an aide to then-President Francois Mitterrand and has never held a minister’s job. A blank slate as a national candidate, Hollande set out to create a persona he called “normal” to contrast with Sarkozy’s “President Bling Bling,” a leader who sought the spotlight.

“While it was hard some months ago to imagine that his ‘moderate man’ image, some call it soft, would be convincing, the fact that he embodies the reverse of Sarkozy created a real rivalry,” said Jean Chiche, a senior researcher at Paris’s Political Sciences Institute. “Maybe that’s what voters will ask for in the ballot, after five years of constant buzzing.”

A victory would make Hollande France’s first Socialist leader since Mitterrand in 1995. He would also be the only Socialist among the European chiefs leading the fight against the region’s financial crisis. His prescriptions including a more activist central bank and revised treaties to promote growth -- and not just enforce austerity -- put him at odds with Germany’s Angela Merkel. She has campaigned for Sarkozy.

‘Tough’ Period

“As for markets, the post-election period will be tough for any candidate,” Jouyet said. Still, Hollande “is fully capable of facing market demands.”

France, which lost its AAA credit rating at Standard & Poor’s in January, is fighting to avoid crisis fallout. The risk premium on 10-year French debt over Germany’s reached the highest since 1990 in November and this year has averaged 110 basis points. That’s about triple the level in 2009, before the market maelstrom began.

Hollande, a lawmaker representing a district in rural France, struggled for nearly 15 years to be considered the natural Socialist leader, forcing him to seek support from the base rather than from the capital’s power networks.

He quit as party first secretary in 2008 after 11 years, triggering an acrimonious succession fight between Martine Aubry and Segolene Royal, the mother of his four children and the loser to Sarkozy five years ago. Aubry won amid accusations by Royal of cheating. Meantime, Hollande went off the radar to plot a comeback in discreet encounters with long-time allies.

Hollande’s Musing

Over the winter holidays that year, Hollande discussed his presidential hopes with his partner, Valerie Trierweiler, she recounted. “Do you think you’re the best?” she asked. “Yes,” Hollande responded. “Then go,” said the 47-year-old journalist for Paris Match magazine and mother of three adolescent boys.

Then he emerged in Lorient. He eventually declared his candidacy in March 2011 in Tulle, the town in central France where he heads the local council of Correze and which he represents in the national parliament.

Hollande used his extended campaign to lose 40 pounds and toughen an image that had earned him the nickname “Flanby,” a Nestle SA (NESN) caramel pudding.

“I had to mature from the light-hearted and funny first secretary of the party that I had been for 11 years,” Hollande told a group of reporters in the southern town of Montpellier March 29. “I had to take it up a notch, show a more responsible, a more presidential face.”

New York Arrest

In May, Hollande trailed Strauss-Kahn, then International Monetary Fund chief, in opinion polls. The economist and former finance minister abandoned a possible bid after he was arrested in New York City on sexual-assault charges. Those charges were dropped by U.S. prosecutors in August.

“Hollande has plowed his own furrow, tilling the soil nearly unnoticed for all these years,” Bernard Cottin, his campaign finance chief and a friend since Institute of Political Sciences of Paris in Paris in 1974, said in an April 12 interview. “He is dogged.”

Former Socialist Prime Minister Lionel Jospin never chose him to be part of his government and he was left in charge to heal the devastated party after Jospin was bounced in the first round of the 2002 presidential race by the far-right National Front. It was Royal who held three ministers’ jobs and won the 2007 nomination to run for president. She made their 2006 separation public after losing the election.

Holdings

Hollande, who reported income of 78,516 euros in 2010, now rents a modern apartment that he shares with Trierweiler for 3,000 euros ($3,932) a month, parking included, in the 15th arrondissement of Paris. He says he holds no stocks and owns nothing like the 50,000-euro Patek Philippe SA watch that was given to Sarkozy by his third wife, Carla Bruni-Sarkozy. He vacations in a 130 square meter (1400 square foot) house with swimming pool near the Riviera bought in 1986 with Royal and that he now owns outright.

Hollande’s path to power followed a traditional French route. He graduated from the Institute for Political Sciences in Paris and the National School of Administration, schools that trained all post-war presidents, except Sarkozy and Charles de Gaulle.

He’d been educated at HEC-Paris, an elite business school where he befriended some who were to become corporate leaders, such as Axa SA (CS) Chief Executive Officer Henri de Castries. His social circle includes Jean-Bernard Levy, CEO of Vivendi SA, and Jean-Louis Beffa, former CEO of Cie. de Saint-Gobain.

Training Ground

“Hollande is a man of networking and in these 30 years he has built strong support from rural France to labor unions and CEOs,” said Paul Boury who heads the lobbying office Boury et Associes. “While Sarkozy promotes himself as business-friendly, Hollande keeps it quiet, but he isn’t any less connected,” he said in a Jan. 27 interview in Paris. “He is the other France: Socialist and pro-business and markets.”

His politics stem largely from his mother, a social worker and an admirer of Mitterrand. His father, whom he described as authoritarian, was a doctor whose far-right views “helped me shape my own convictions,” he said in the speech that launched his bid on Jan. 22 in Le Bourget, near Paris.

“Hollande is a social democrat in the sense that he accepts that the market is the ‘allocator by default’ of resources,” London-based Gilles Moec, co-chief European economist at Deutsche Bank AG, said in an interview. “Also, he accepts that other civil actors, such as unions, not just the state, play an important role in shaping policies.”

Left Front

That balance prompted former Socialist Jean-Luc Melenchon to form a bloc he has called the Left Front, which may pressure Hollande to adopt policies to make markets shudder.

While Hollande has called financial markets his “real enemy” and advocated cracking down on derivatives, he has committed to eliminating the budget deficit by 2017, albeit a year later than under Sarkozy’s plan. He has said he would “defend the social model,” stop Sarkozy’s reduction in the civil service and raise taxes on the wealthy, including a 75 percent levy on earnings of more than 1 million euros.

Like Sarkozy, Hollande speaks minimal English. There’s more than language to learn on the fly. His first foreign trip after swearing-in the week of May 14 would be to see Merkel in Berlin. On May 18, the presidential Airbus heads to Camp David, the White House retreat in Maryland, for a Group of Eight summit to be followed by a meeting of NATO leaders in Chicago.

‘Unknown Quantity’

“If Obama asked me, ‘who is he?’ I would say that as a president, he is a totally unknown quantity,” said Ezra Suleiman, a political-science professor at Princeton University and member of the Suez Environnement supervisory board. “The hatred against Sarkozy has grown to such proportion in France that many voters have no choice but to trust him and hope he’ll have the shoulders for what unbelievably painstaking situation he could face starting May.”

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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