The first round of France’s presidential elections felt to me like a reunion: Nicolas Sarkozy used to be the mayor of my home town (Neuilly), Gaullist candidate Nicolas Dupont-Aignan was my TA at Sciences-Po, and Pierre Moscovici (François Hollande’s campaign manager) was my instructor in public administration.  Yet I miss none of those contenders and feel lucky that I no longer live in France -not least because of my acute boredom in Dupont-Aignan and Moscovici’s classes.  For if Sarkozy loses, as polls predict he will, France will face bankruptcy and the Euro may not survive.  Despite my disappointment with Sarkozy and despite my annoyance at his antics, I endorse him.

I criticized Sarkozy sharply after he was caught red-handed smearing my Prime Minister in November 2011 (“Sarkozy, c’est fini” November 8, 2011).  I ridiculed his foreign policy record, expressed dismay at his treatment of Israel, and claimed that his meager economic reforms were a far cry from the sweeping changes he had promised.  I concluded thus: “Sarkozy has lost the Jewish vote and his likely defeat in the upcoming French elections will be well deserved. Sarkozy, c’est fini.”  I stand by every word: Sarkozy does not deserve to be re-elected in light of his record, and his cavalier attitude toward Israel in the past two years makes it impossible for me to pity him.  Yet, compared to the alternative, he is the least of two evils.  I call upon the French people to hold their nose and to vote for him.

France’s economy is on the verge of sharing the fate of its southern neighbors because of its low growth, of its unsustainable debt, and of the justified nervousness of financial markets.  The French state is the OECD’s biggest spendthrift: French public spending accounts for 56% of GDP, compared with an OECD average of 43%.  Like its European neighbors, France built a generous welfare state after WWII.  But the sharp economic slowdown of the 1970s took away the economic growth and tax income that sustained the European welfare state.  And European demographics (longer lifespan and lower fertility rates) inevitably reduce the number of taxpayers while increasing the number of entitled retirees.  Add to this economic globalization, which enables money and factories to move freely to tax-friendly countries, and you understand why the French government cannot make ends meet and keeps borrowing to pay its bills.

As opposed to its northern neighbors, France never tuned its spending with demographics and with globalization.  The successful reforms of Margaret Thatcher in Britain (in the 1980s) and of Gerhard Schröder in Germany (in the 1990s) never happened in France and probably never will: the French strongly believe (as polls consistently show) that capitalism is evil and that the State cannot possibly run out of money.  While in Britain, Ireland, Portugal and Spain people have voted in the past two years for parties and leaders that promised painful economic reforms, the French have given their votes on April 22 to candidates who blame globalization and financial markets for France’s economic woes and who promised none of the reforms that the French economy direly needs.

The result of France’s refusal to come to terms with economic reality is that French public debt stands at 90% of GDP (a figure that keeps rising and that will reach 100% in 2015 according to the Cour des Comptes, France’s state auditor) and that the French state has not balanced its books since 1974.  France has the Euro zone’s largest current-account deficit in nominal terms.  France’s banks are undercapitalized.  France suffers from a structural unemployment rate (10% compared to 5.8% in Germany) partly because labor in France is too expansive (French employers pay twice as much in social charges than in Germany).

Until the financial crisis that erupted in 2008, France could live on credit because, after all, the French economy does have many assets.  But easy borrowing is over, and so France may well end-up sharing the fate of Greece.

France must wake up to reality before it is too late, and its presidential candidates must say the truth to voters.  Yet they are doing the very opposite, especially François Hollande, the socialist contender.

Hollande’s platform includes the increasing of public spending, the partial roll back of Sarkozy’s rise in the pension age from 60 to 62, a 75% income tax on the rich, and an increase of the annual wealth tax (levied annually on assets worth over €1.3m). By his own calculations, Hollande’s proposals would cost the French government an extra €20 billion over five years. While the French state needs a serious and urgent diet, Hollande would make it grow even bigger.  Worse, Hollande vows to renegotiate the European fiscal act, a hard-won deal that imposes budgetary discipline in the Euro-zone.

In short, a Hollande victory would generate a credit crunch, a brain-drain, and it would further destabilize the Euro.  Instead of tackling France’s structural economic imbalances, Hollande will bring France to bankruptcy and the Euro to an end.

Nicolas Sarkozy’s economic reforms have indeed been meager during his five years in office, but a re-elected Sarkozy with no fear of the electorate might actually take the necessary and unpopular measures that are required to save France from bankruptcy.  Sarkozy may not deserve the benefit of the doubt and he may not even deserve to be reelected, but his replacement by Hollande would bring economic catastrophe upon France and upon Europe.  For that reason alone, the French should put aside their justified dislike of Sarkozy and reelect him.