Can Hollande save Europe?

AFTER slamming Europe’s austerity fix for the debt crisis, Francois Hollande’s crusade for growth began picking up support even before his win, but can he bring the skeptics and the markets around? One of only a handful of Socialist leaders at the European Union table, Hollande’s win adds another voice for the left after the ousters of Britain’s Gordon Brown, Portugal’s Jose Socrates and Spain’s Jose Luis Zapatero.

In his first words the freshly elected French president said his victory marked “a new departure for Europe and hope for the world” because it showed “austerity can no longer be the only option.” But as unemployment hits its highest level ever in Europe since the creation of the euro, Hollande’s calls to rewrite a just-inked and long-negotiated EU fiscal pact to enforce budgetary discipline has upset markets and ruffled German Chancellor Angela Merkel.

“There is real potential for friction,” said analyst Maurice Fraser of London’s Chatham House think-tank.

“Can they change the wording, will he be happy with a vague shift?” he said of a pact agreed by 25 of the EU-27 on terms largely penned by Merkel and her French ally, outgoing incumbent Nicolas Sarkozy.

“These issues will take a long time to negotiate with Germany,” Fraser added. “And the Franco-german motor will need to demonstrate the show is not coming apart. They might have been high-handed but at least they looked like credible European leaders.”

Seeking to soothe fears of a breakdown in the Paris-berlin partnership that drove Europe through the crisis, German Foreign Minister Guido Westerwelle said after Hollande’s victory: “We will work together on a growth pact.” “I have no doubt that we will rise to our common challenges,” he added.

As austerity fatigue sets in across the continent, driving far-right gains in France and Greece, Hollande’s call for a switch of focus has found wide support — from French voters, from the European Commission and to an extent from the man in charge of euro zone monetary policy, European Central Bank chief Mario Draghi. But Hollande faces parliamentary elections as soon as mid-june and will need to show his electorate he can deliver.

Meanwhile, Spain has cash flow trouble, Italy is fighting to stay afloat and an under-performing France — already facing lengthening jobless queues and growing disparity with Germany — has been threatened with a ratings downgrade in the wake of an Hollande victory.

So much speculation touches on whether the new leader of the world’s fifth economy — Europe’s second — will hugely disrupt EU and eurozone politics with his calls for a swing to growth.

“Europe should have no real reason to fear his victory,” said analyst Thomas Klau of the European Council on Foreign Relations, after The Economist labelled him “the rather dangerous Monsieur Hollande.”

The new French leader, a pro-european said to have arch European federalist Jacques Delors as his mentor, “is a natural compromisebuilder,” Klau said.