French elections could shift euro debt crisis

France's President and Union for a Popular Movement candidate for the 2012 presidential election Nicolas Sarkozy delivers a speech after the first round of the 2012 French Presidential election at Maison de la Mutualite on April 22, 2012 in Paris, France.

Jeremy Hobson: France is one step closer to replacing its conservative president with a socialist one. Incumbent Nicolas Sarkozy came in second yesterday to Socialist Francois Hollande in the first round of voting. The two candidates will face a run-off on May 6th, and the ultimate outcome could have big consequences for Europe's debt crisis.

The BBC's Hugh Schofield joins us now from Paris with more. Good morning.

Hugh Schofield: Good morning.

Hobson: Now, we've been reporting that if Sarkozy ends up losing -- France goes over to a socialist leader -- that it might call into question some of the agreements that have been reached to deal with Europe's debt crisis and that Europe might go back into crisis mode. What's the word on the street about that today?

Schofield: Well, I mean, it would certainly be irresponsible to say that if Hollande gets elected it will switch straight back into crisis mode. In terms of there being an immediate problem, or France's rating could be downgraded if Hollande gets in, I very much doubt that. But, they will be looking for signals over the future weeks and months of a Hollande victory to see what kind of message he's sending about getting France's finances in order.

Hobson: Now the term "socialist" gets thrown around all the time in this country. When you hear about a socialist country in France, are we to assume that person is pro-government all the way -- anti-business, even?

Schofield: No, I don't think one could say that. I mean, the modern Socialist party in France is realistic; it works in the real world. It's constantly being attacked by its left-wing for having sold out to the forces of capitalism and so on. Yes, he will want to balance the books by putting up taxes on the very wealthy.

The problem is that what the markets and what economists are saying is needed in France is radical reform of labor markets, and that is really much less likely to happen under Hollande than under Sarkozy -- even under Sarkozy not that much has happened in that direction either.

Hobson: The BBC's Hugh Schofield in Paris, thanks a lot.

Schofield: Thank you.

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