French socialists bury anti-debt ‘golden rule’

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As the majority in the French Senate swung to the left yesterday (25 September), François Hollande, the front runner of the Socialist Party for the 2012 Presidential election, declared "dead" the push of the centre-right to enshrine a 'golden rule' in the country's constitution, aimed at limiting debt. EURACTIV France reports.

For the first time since 1958, the right-dominated Senate, the upper house of the French Parliament, swung to a left-wing majority, following an indirect poll to elect members of the Senate, held on Sunday. 170 of the 343 seats of the upper chamber of the French Parliament were reattributed, trough an indirect electoral process comprised of approximately 72,000 elected officials casting their votes.

Sarkozy's Union pour un Mouvement Populaire (UMP) had 147 seats out of a total 343 to the Socialist Party's 115 before Sunday's vote. Early results from the indirect elections showed left-wing candidates took 177 seats, two more than neede to secure an absolute majority. Final results are expected later on Sunday.

The shift to the left, which UMP Senate leader Gerard Larcher had described as having "seismic" consequences ahead of a presidential election next April, drew howls of joy from left-wing supporters at a meeting in Paris, Reuters reported.

Asked by journalists to comment on the 'golden rule' in France's constitution, a proposal by French President Nicolas Sarkozy which must still be voted through by the parliament, François Hollande, the front runner of the Socialist Party for the 2012 Presidential election, made it clear that the new majority would block the initiative.

"The golden rule is death and bloody well dead," he said.

Holland also called "false" the text, proposed by the previous majority. He admitted however that in case of vote of the socialists at the presidential election, a strategy to re-balance public finance would be voted in Parliament. But he insisted that there was "no need" to enshrine it in the country's constitution.

François Hollande is leading in opinion polls ahead of a Socialist primary election due on 9 October, closely followed by Martine Aubry, Socialist Party leader and mayor of Lille. One of the other contenders for the Socialist nomination is Ségolène Royal, Hollande's former partner and the mother of their four children. Ségolène Royal lost against Sarkozy in 2007.

Germany has led the way in pushing forward the idea that eurozone governments should enshrine deficit-limiting rules in their constitutions on an obligatory basis. The country has introduced a constitutional requirement that its deficit could not excede 0.35% of its GDP, which is effective from 1 January 2011.

In August, Spain became the first EU country to follow the advice of Germany and France and start a parliamentary procedure to enshrine in its constitution a 'golden rule' guaranteeing budgetary stability.

On 6 September, Italy too pledged to insert a balanced budget amendment into its constitution to limit debt.

The International Monetary Fund has recently warned France it could lose its AAA credit rating if the country were to miss its key target of cutting its deficit to the eurozone ceiling of 3% of GDP by 2013.

French President Nicolas Sarkozy has already proposed to enshrine a 'golden rule' in France's constitution, a proposal which must still be voted through by the parliament and Senate in a 'congress' meeting. The socialist opposition has pledged to block it.

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