The left has scored well in the first round of French parliamentary elections, leaving the Socialist party within reach of an absolute majority that would give Fran�ois Hollande, the president, a free hand in his approach to dealing with the economic crisis.Implications Not Pretty
The Socialists need 289 out of the 577 seats in the national assembly to take an absolute majority in the final runoff on Sunday 17 June.
First-round results show the Socialists are predicted to take between 275 and 315 seats, according to polling company TNS Sofres, and could make up the numbers with the backing of their electoral allies, the Greens.
The first round vote results suggest that the broad left will dominate parliament. Early results and estimates showed the left in general taking 47%, the right 35% and the far-right Front National 13%.
One of the biggest defeats of Sunday evening was Jean-Luc M�lenchon, the firebrand hardline leftist from the Front de Gauche. He had stood in a high-profile, deprived Pas-de-Calais constituency in a personal battle against Front National leader Marine Le Pen, but was knocked out in the first round.
Le Pen will now face a Socialist in the runoff. M�lenchon said he was disturbed by Le Pen's high score and would continue to fight the far right.
If the Socialists win an absolute majority, it would be the first time in modern history that the party had control of both houses of the French parliament: the assembly and the senate.
I applaud the throw the bums out mentality. However, the new bums will be at least as bad judging from proposed financial transaction taxes, rollbacks in retirement age, and economically insane plans to restrict layoffs.
Economically Insane Ideas Coming Up
Last Friday, citing Reuters, I reported Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"
Today, the Financial Times confirms the proposal in its report France plans law to make firing harder
Michel Sapin, labour minister, said part of an ?urgent? response to joblessness was to penalise companies that seek to increase dividends and maximise profits by shifting production to lower-cost locations ? dubbed ?stock market redundancies?.If Hollande goes down the path he has stated, the French economy will soon enough be in ruins, likely in need of a bailout.
?The main idea is to make redundancies so costly that it?s not worth it,? he told France Info radio.
Mr Sapin, who said he planned to introduce legislation after the summer, said the level of compensation for fired workers and the cost of converting an abandoned plant to new use should be made sufficient to deter businesses from resorting to redundancies.
Such a move would be in defiance of calls from business for an easing of the country?s already weighty employment protection legislation, which was singled out last week by the European Commission as one of the structural factors inhibiting the French labour market.
But the government, which is hoping to win a parliamentary majority in National Assembly elections on June 10 and 17, is under pressure from trade unions to take action in the face of a wave of redundancies threatened or under way across a number of French industries, particularly carmakers, telecoms companies, banks and airlines.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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