Poll win strengthens Hollande's hand

Mon, Jun 18, 2012, 01:00

A resounding Socialist victory in weekend parliamentary elections will allow president Francois Hollande to press ahead with reforms to tame France's deficit and promote economic growth in Europe, a senior minister said today.

The Socialists, who won a comfortable majority in today's parliamentary elections, will use a special session of parliament next month to axe tax breaks and increase taxes for large corporations, particularly banks and energy companies.

The measures are part of Mr Hollande's twin track drive to balance France's budget by 2017 and persuade Germany to back his call for a stimulus package of more than €120 billion to boost growth.

Election results for mainland France showed the Socialists and their affiliates won 307 seats, comfortably exceeding the 289 required for a majority in the National Assembly.

Definitive figures including overseas territories were due later today, with polls predicting the Socialists could win up to 320 seats.

With the left already controlling the Senate upper house of parliament, that would free the Socialists from relying on the votes of the anti-austerity, eurosceptic Left Front or the conservative UMP opposition.

Interior minister Manuel Valls said the government would waste no time in pressing ahead with promised reforms.

"We need to sort out this country's finances, to ensure we achieve a balanced budget by 2017, and at the same time pursue our priorities in terms of growth, employment, education and security," said Mr Valls, promising tax reforms to ensure that the richest French pay their share.

Mr Valls said that a resurgence in the vote for the National Front - which won two parliamentary seats and returns to parliament for the first time since the mid-1980s - was due to widespread disenchantment with France's economic situation.

"We need to mobilise our European partners because piling more austerity on top of austerity will lead to tragedy and a deep rift between the peoples of Europe and their politicians.

"With unemployment at a 13-year high of 10 per cent and economic growth stagnating, Mr Hollande faces a delicate balancing act in reducing the government's deficit and keeping the euro zone's second largest economy out of the sights of financial market speculators attacking Spain and Italy.

The government may use a review of government finances by the state auditor, due by the end of June, to temper its campaign spending promises.

Mr Hollande was to address a summit of G20 leaders in Mexico today. He travels to Rome on Friday for four-way talks with Italian prime minister Mario Monti, German chancellor Angela Merkel and Spanish prime minister Mariano Rajoy ahead of an EU leaders summit at the end of June which is due to discuss closer economic integration in the bloc.