Heeding Political Pressure, France Will Avoid Reforms

Local elections in France scheduled for March 22-29 are expected to confirm the far-right National Front party's emergence as a major political force while the ruling Socialist Party performs poorly. This will shape the rest of President Francois Hollande's term.

The government's passage of an economic reform package known as the Macron Law has convinced the European Commission to give France two more years to bring its deficit to below 3 percent of gross domestic product. However, the next reforms on the agenda will not be enough to revive the stagnant French economy, nor will they successfully lower unemployment. During the next few months, Hollande will try to appease dissent within his majority by implementing social measures and postponing any structural economic reforms. The gap between Germany and France will keep growing, but Berlin will need Paris' backing in negotiations with Athens after the end of Greece's bailout program in late June, and thus Berlin and Brussels will limit the pressure put on Paris. Meanwhile, the National Front will continue to gain ground ahead of the next presidential election, slated for 2017.