On the day Francois Hollande was inaugurated as President of France, his airplane was struck by lightning. At the time, I half-jokingly quipped that "Mother Nature [was] sending an omen about the future of the Eurozone." It turns out, however, that the lightning bolt sent from above was aimed not at the European Union but squarely at Mr. Hollande himself. And just in case a little zap of heavenly electricity wasn't enough to garner his attention, the Fates arranged for somebody to eat Mr. Hollande's camel.
This past week, the celebrity gossip magazine Closer revealed that Mr. Hollande was having an affair with French actress Julie Gayet. Since then, his partner, Valerie Trierweiler -- who is supposedly still the First Lady of France -- has been hospitalized. Mr. Hollande has not denied the accusation, though he has threatened legal action against Closer for allegedly violating France's strict privacy laws. He also said that he was going through a "difficult moment," which apparently is man-speak for "banging another woman." And just to add insult to injury, Ms. Gayet is rumored to be four months pregnant.
French citizens have been unperturbed by the entire fiasco. In a recent poll, 77 percent said that Mr. Hollande deserves privacy. And unlike the American media, the French press largely respects such personal boundaries.
So, the danger here for France is that Mr. Hollande will be distracted and, hence, even less likely to implement the economic reforms his country so badly needs. Currently, France's debt-to-GDP ratio is over 90 percent, the 17th worst in the world according to the CIA. Its punitive and uncompetitive marginal income tax rate, set at 75 percent, may drive away talented soccer players. And Gerard Depardieu -- who recently bid France adieu -- is now a Russian.
Just how bad are things in France? Bad enough that The Economist ran a cover story late in 2012 about how France is a "time-bomb at the heart of Europe." The editorial read:
The business climate in France has also worsened. French firms are burdened by overly rigid labour- and product-market regulation, exceptionally high taxes and the euro zone’s heaviest social charges on payrolls. Not surprisingly, new companies are rare. France has fewer small and medium-sized enterprises, today’s engines of job growth, than Germany, Italy or Britain... Over 10% of the workforce, and over 25% of the young, are jobless... In short, too many of France’s firms are uncompetitive and the country’s bloated government is living beyond its means.
Even worse, the article argues that economic turmoil in France could threaten the survival of the Eurozone itself.
Under such dire circumstances, it is unsurprising that Mr. Hollande's approval rating has crashed. At one point last year, it was a dismal 15 percent. Ironically, perhaps French sympathy over the perceived violation of Mr. Hollande's private life will serve to reverse his sagging fortunes. After you hit rock bottom, there's nowhere to go but up.
(AP Photo)
