June 16 (Bloomberg) -- French President Francois Hollande is about to learn just how much power he has.
The second round of the French legislative elections tomorrow will determine whether he has control of the lower house of parliament to push through the tough decisions needed as Europe’s debt crisis intensifies.
While his Socialist Party is projected by pollsters to win the largest number of seats in parliament, Hollande may also have to rely on parties that are anti-European and more adamant than he is about rejecting German-led austerity, which has been a key piece of the plan for Europe’s crisis recovery.
“Should the Socialist Party have to depend on the anti-capitalist, anti-globalization, anti-austerity Left Front, we believe it would pull the new government further to the left and open up wider divisions between Paris and Berlin over the handling of the eurozone crisis,” Alastair Newton, senior analyst at Nomura International, wrote in a note to clients.
The French election coincides with a vote in Greece, where the possible success of anti-austerity parties may set in motion that country’s exit from the euro. Meanwhile, banking-sector woes and recession concerns have sent borrowing costs soaring in Spain and Italy. Closer to home, France’s growth has stalled and its joblessness is the highest in 13 years.
With 289 seats required for a majority in the National Assembly, the Socialists may win between 280 and 310 seats, pollsters TNS-Sofres forecast, based on the results of June 10’s first round.
That may leave them needing to rely on the Greens or even the communist-backed Left Front for a working majority. The Greens may win between 12 and 17 seats, and the Left Front 13 to 18, TNS predicts. Former President Nicolas Sarkozy’s Union for a Popular Movement and its allies may get 235 to 265 seats.
“The ecologists are pro-European and shouldn’t cause too many problems for Hollande,” said Dominique Reynie, a senior researcher at Paris’s Institute of Political Studies. “It will get a bit more complicated if they have to rely on the Left Front, who have deputies hostile to Europe.”
Victory for Hollande’s party would give France’s Socialists control of the presidency and the National Assembly for the first time since 1993. The Socialists took control of the Senate, the upper house of parliament, last year for the first time in 50 years. On a local level, the Socialists and their allies control 20 of mainland France’s 21 regions.
France’s National Assembly is divided into 577 constituencies. In 36 of them, a candidate took more than 50 percent in the first round and was elected. In the rest, run-offs will be held among all contenders receiving more than 12.5 percent of registered voters. After some candidates dropped out as part of electoral pacts, there will be 34 constituencies with three candidates running.
“In some form or another, there will be a majority in the French parliament so that’s off my list of things to worry about,” said Tina Fordham, senior global political analyst at Citigroup Inc. “They will be able to push through legislation.”
The Left Front has said it would support Hollande’s government, although the parties don’t agree on all issues. The Left Front’s presidential candidate Jean-Luc Melenchon openly support Greece’s Syriza, which wants to renegotiate Greece’s European Union aid agreements. Hollande has said Greece must abide by its rescue deals, even if he has also spoken about the need for growth measures.
Melenchon himself won’t be in parliament. He was eliminated in the first round in a failed attempt to challenge Marine Le Pen, head of the anti-immigrant National Front.
“Given Melenchon’s oratory skills, his presence in parliament would have created all sorts of problems for Hollande if he ever did have to impose austerity measures,” Reynie said.
Marine Le Pen is facing a Socialist candidate in a northern constituency as she seeks to become the first member of the anti-euro National Front ever to hold a seat in parliament.
Another closely watched race is in the west of France where Segolene Royal, the Socialist presidential candidate in 2007 and the mother of Hollande’s four children, faces a local renegade Socialist. The Socialist Party officially supports Royal. Hollande’s current partner Valerie Trierweiler sent a post via Twitter backing her opponent.
Finance Minister Pierre Moscovici took 41 percent in his constituency in eastern France and is expected to win in the run-off against candidates from the UMP and the National Front. Prime Minister Jean-Marc Ayrault and Foreign Minister Laurent Fabius were elected in the first round.
Turnout in the first round was 57.2 percent, less than the 61 percent in 2007, the Interior Ministry said.
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