France looks like a catalyst for euro doom

It is half of the Franco-German motor that drives the European Union. It has been the swing country in the euro crisis, poised between a prudent north and spendthrift south, and between creditors and debtors. And it is big. If France were the next euro-zone country to get into trouble, the single currency's very survival would be in doubt. That is why the likely victory of the Socialist candidate, Francois Hollande, in France's presidential election matters so much.

In the first round on April 22, Hollande came only just ahead of the incumbent, Nicolas Sarkozy. Yet he is expected to win the second round on May 6.

With a Socialist president, France would get one big thing right. Hollande opposes the harsh, German-enforced fiscal tightening that is strangling the euro zone's chances of recovery. But he is doing this for the wrong reasons -- and he looks likely to get so much else wrong that the prosperity of France (and the euro zone) would be at risk.

Although you would never know it from the platforms the candidates campaigned on, France desperately needs reform. Public debt is high and rising; the government has not run a surplus in over 35 years; the banks are undercapitalized; unemployment is persistent and corrosive, and, at 56 percent of GDP, the French state is the biggest of any euro country.

Hollande's program seems a very poor answer to all this -- especially given that France's neighbors have been undergoing genuine reforms. He talks a lot about social justice, but barely at all about the need to create wealth. Although he pledges to cut the budget deficit, he plans to do so by raising taxes, not cutting spending. The state would grow even bigger.

Optimists retort that compared with the French Socialist Party, Hollande is a moderate. They dismiss as symbolic his flashy promises to impose a 75 percent top income tax rate and to reverse Sarkozy's rise in the pension age from 60 to 62. They see a pragmatist who will be corralled into good behavior by Germany and by investors worried about France's creditworthiness.

But it seems optimistic to presume that somehow, despite what he has said, despite even what he intends, Hollande will end up doing the right thing. He evinces a deep antibusiness attitude. He will also be hamstrung by his own unreformed Socialist Party and steered by an electorate that has not yet heard the case for reform, least of all from him. Nothing in the past few months, or in his long career as a party fixer, suggests that Hollande is brave enough to rip up his manifesto and change France.

The trouble is that unlike, say, Italy's Mario Monti, Hollande's objection to the compact is not just about such macroeconomic niceties as the pace of fiscal tightening. It is chiefly resistance to change and a determination to preserve the French social model at all costs. Hollande is not suggesting slower fiscal adjustment to smooth the path of reform; he is proposing not to reform at all. No wonder Germany's Angela Merkel said she would campaign against him.

A rupture between France and Germany would come at a dangerous time. Until recently, voters in the euro zone seemed to have accepted the idea of austerity and reform. Technocratic prime ministers in Greece and Italy have been popular; voters in Spain, Portugal and Ireland have elected reforming governments.

But nearly one in three French voters cast their first-round ballots for far-right or far-left candidates, running on antieuro and antiglobalization platforms. And now Geert Wilders, a far-right populist, has brought down the Dutch government over budget cuts. Although in principle the Dutch still favor austerity, in practice they have not yet been able to agree on how to do it. And these revolts are now being echoed in Spain and Italy.

It is conceivable that a President Hollande might tip the balance in favor of a little less austerity now. Equally, he may scare the Germans in the opposite direction. Either way, one thing seems certain: A French president so hostile to change would undermine Europe's willingness to pursue the painful reforms it must eventually embrace for the euro to survive.