* Hollande returns to euro crisis, stagnant economy
* Rioting and Roma gypsy expulsions test Socialists' unity
* President now under pressure to achieve results
By Brian Love
PARIS, Aug 20 As post-election euphoria wanes,
French President Francois Hollande returns from vacation under
pressure to show that beyond dismantling the legacy of his
predecessor he can act decisively at home while grappling with
recession in Europe.
Awaiting him are the crisis that still haunts the euro zone,
fragile relations with German Chancellor Angela Merkel, and
French political opponents who accuse him of sunning himself on
the beach while Syria slides into chaos.
Hollande, whose election win was due in large part to voter
fatigue with Nicolas Sarkozy, stopped short of promising a rapid
economic upturn, arguing that the rich should do more to help
restore France's public finances and that the job could be done
without drastic Greek-style cuts in wages or welfare.
But the French economy remains at a stubborn standstill and
a bout of rioting during Hollande's break has highlighted the
challenge he faces to improve the lives of people living in the
depressed housing estates that ring many French cities.
As he marks 100 days in office this week, the Socialist who
branded himself "Mr Normal" and promised a break with the showy
style of the conservative Sarkozy has largely delivered on that
He has raised taxes that Sarkozy lowered for the wealthy,
partly rolled back a reform that raised the pension age to 62
from 60, and scrapped plans to raise the rate of VAT sales tax.
Hollande has reduced his own salary (Sarkozy had raised
his), makes a point of travelling by train rather than private
jet when he can, and tells his driver to stop the car when
traffic lights go red - all symbolically important.
The problem now is that having rebranded the presidential
style, Hollande needs to prove he is an effective leader - or as
he said himself days after his election on May 6, to prove that
"simple doesn't mean mediocre".
There is a risk now, as influential newspaper Le Monde put
it this weekend, that Hollande, who returned by train to Paris
on Sunday night from two low-key weeks at the presidential
Bregancon Fortress on the French Riviera coast, gets stuck in a
He needs to disprove Sarkozy's pre-election claims that
Hollande's "normality falls short of the demands of the job".
"It was a great idea to win an election but is it sufficient
to govern?" Jean-Luc Mano, a political communications
consultant, asked in Le Monde.
Hollande's popularity is flagging. In a recent survey, the
Ifop polling agency said the percentage of people saying they
were satisfied with him edged down to 56 percent in July from 59
a month earlier and 61 in May, the month he won power.
Those ratings are if anything marginally weaker than
Sarkozy's ratings at the outset of his term but pollsters say
Hollande is coming in in the middle of a crisis and Sarkozy took
power at a time of greater optimism and confidence.
Sylvie Chaineau, a social services worker who deals daily
with domestic strife in western France, voted for Hollande and
believes he has made a good start but says she now hopes to see
"He didn't promise miracles and I am not putting the bar too
high and he will need a bit of time ... there's a crisis and we
all need to do our bit," said Chaineau.
"I know that's not everyone's view. My hairdresser was
howling about the government and rising expenses for employers."
UNDER PRESSURE ON ALL FRONTS
The backdrop to the challenges facing Hollande is a debt
crisis that has plagued the euro zone for two and a half years,
his promise to balance France's books without resorting to
Greek-style cutbacks, and his positioning as a counterweight to
Merkel's tough austerity strategy.
French officials say a meeting on Thursday between Hollande
and Merkel, sure to be subject of renewed focus in financial
markets after a lull in financial and political activity the
past few weeks, will not produce any new decisions.
But in Berlin they hope it will at least show that Hollande
remains faithful to the Franco-German axis that has provided
leadership in the euro zone for decades.
In Merkel's closest circles, officials say Hollande is still
in the process of "discovering himself" but needs to demonstrate
he will not let up on pledges to slash France's large deficit.
Others are more disheartened by his visible scepticism over
Merkel's austerity line - even if his efforts ultimately boiled
down to securing a modest 120-billion-euro spending commitment
at European level.
"Nothing is working between Germany and France at the
moment," a senior official from one of Germany's ruling parties
said. "The expectation that everything would improve after the
French elections was unrealistic. Other euro zone countries are
beginning to worry because the German-French axis simply isn't
functioning," the official said.
Hollande secured pro-growth adjustments to the European pact
on budget responsibility but is already considering big cutbacks
in infrastructure spending. His government needs to drum up 33
billion euros in spending cuts and extra tax revenues in 2013 so
that it can deliver on deficit-reduction targets and knock the
deficit to 3.0 percent of GDP from 4.5 percent this year.
His government is due to present its 2013 budget bill in
MORE THAN MANAGING MERKEL
Hollande's problems go beyond how he manages relations with
Merkel and accusations from Sarkozy's camp that he has failed to
show leadership in the worsening Syrian crisis.
At home, his government is under pressure to show a firm
hand after clashes between police and armed youths in the
northern city of Amiens last week. But law and order issues are
showing up divisions within the government.
Interior Minister Manuel Valls is under attack from within
his own party over renewed expulsions of illegal Roma gypsy
immigrants, a policy denounced by many on the left when applied
Valls remembers well that Socialist prime minister Lionel
Jospin was tumbled out of a presidential election race by
far-right leader Jean-Marie Le Pen in 2002 partly because he
failed to take a hard line on law and order.
Hollande's problem now is that he must ensure that mistake
is not repeated, but without riding roughshod over members of
his party who believe that, without measures to improve job
prospects and social integration, police crackdowns on their own
are doomed to fail.
The potential for division was highlighted on Monday when
Socialist Party boss Martine Aubry said the Gypsy camp evictions
ordered by Valls in the northern city of Lille, Aubry's
political fiefdom, were "regrettable" because no alternative
lodgings had been found beforehand.
Prime Minister Jean-Marc Ayrault has called a meeting of
ministers on the Roma camps on Wednesday, presumably to ensure
that the matter does not give rise to public disputes between
hardliners such as Valls and advocates of less frontal security
policies, such as Justice Minister Christiane Taubira.
On the social front, Ayrault met union leaders before the
holiday and promised to pursue more constructive industrial
relations based in dialogue.
But that is a slowburn project that will do little to
prevent tens of thousands of further job cuts in industry in
addition to the 8,000 layoffs carmaker PSA Peugeot Citroen
announced in July, at a time when unemployment is higher than
any time since August 1999.
"It's all a communications job so far - necessary but not
sufficient," says Guy Groux, an industrial relations expert at
Sciences Po University in Paris. "They put an orchestra in
place. Now it needs to start the symphony."