May 15 (Bloomberg) -- French President Francois Hollande’s first anniversary in office today was marred by confirmation of France’s second recession in two years.
Europe’s second-largest economy shrank 0.2 percent in the first quarter, the same pace as in the previous three months, as investment and exports plunged and consumer spending dropped, national statistics office Insee said today.
“Francois Hollande has been in trouble from the beginning,” said Dominique Reynie, a politics professor at Sciences Po in Paris. “No candidate in last year’s election addressed the true state of the world. Today Hollande is paying the price for that.”
Hollande’s approval rating is 24 percent, according to a TNS Sofres poll of 1,000 voters taken between April 24 and 27. The next lowest rating at this stage of a presidential mandate was Nicolas Sarkozy’s 32 percent in 2008, TNS data shows. Francois Mitterrand and Jacques Chirac held at 44 percent or more in both of their two terms.
Hollande is struggling to balance demands from the European Union for deficit reduction and voter frustration with record joblessness. Two weeks after the European Commission gave France two extra years to cut its deficit below 3 percent of gross domestic product, Hollande todays meet all European commissioners, the first such gathering for a French president since 1997. He holds a press conference in Paris tomorrow.
French lawmakers yesterday approved a plan that will loosen the nation’s labor laws and Hollande has begun talks with unions and business leaders about overhauling the retirement system. Last month, he announced he was rolling back some of his own tax increases.
“Francois Hollande has a personal responsibility in the worsening of the French economic situation,” Jean-Francois Cope, head of the opposition UMP party, told reporters today. “Our companies are strangled by tax measures that penalize their competitiveness, that penalize their margins, and penalize their ability to invest and hire.”
Hollande and his lieutenants say France’s troubles are no worse than the 17-nation euro area’s. “The economic situation in France results above all from the aggravation of the euro zone’s economic crisis, even if France held up better at the end of the year than most of its partners,” Najat Vallaud-Belkacem, the government’s spokeswoman said today.
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