PARIS — Francois Hollande’s Socialist Party swept France’s parliamentary election Sunday as voters welcomed the French president’s vision of injecting government money into Europe’s economies in hopes of helping the joint euro currency stave off disaster.
Socialists now have an unprecedented lock on politics in France, and plan to use it to raise taxes on big banks and oil companies, levy a 75 percent tax on incomes higher than about $1.26 million a year, and hire 60,000 teachers. Hollande’s strong domestic mandate will let him push back in global economic talks against the budget cuts being demanded by Germany, which Greece and other indebted countries have said are driving them deeper into the financial abyss by suffocating growth.
France’s election Sunday also gave the far-right National Front a toehold in Parliament, a small but symbolic victory for a party that wants to stop immigration, dump the euro currency and decries the so called Islamization of France. The conservative UMP party of former President Nicolas Sarkozy, which dominated the outgoing Parliament, suffered the biggest losses.
Pollsters estimated France’s Socialists and their closest allies will hold between 313 and 315 of the 577 seats in France’s lower - and more powerful - house of Parliament.
“This score exemplifies strong confidence in the president,” said Finance Minister Pierre Moscovici, who won his own race for an Assembly seat. “This gives a spinal column to the government and strengthens it ... our commitments will be honored. We will not do any austerity.”
Sarkozy’s UMP party went from 304 seats in the old Assembly to an estimated 214 in the new one. Sarkozy lost his re-election bid to Hollande six weeks ago.
Hollande wants to crack down on tax shelters and encourage companies to reinvest their profits. Also on tap is a requirement for banks to split their traditional deposit and-loan activities from their speculative bets in the financial markets.
Hollande’s government already has made good on a contentious plan to lower the retirement age for some French workers to 60 from 62. He also slashed the salaries of government ministers by 30 percent - a nod to a public wary of the much-criticized bling of Sarkozy’s reign.
Hollande presented other European leaders last week with a new “growth pact” including about $151 billion worth of measures around the continent to stimulate growth, the Journal du Dimanche newspaper reported. A French official confirmed the report but would not provide details.
German Chancellor Angela Merkel has opposed Hollande’s vocal push for government stimulus and is defending an austerity package that she worked out with Sarkozy, a fellow conservative.
France’s debts are huge and its unemployment rate recently rose to 10 percent - the highest rate in 13 years. The little known ratings agency Egan-Jones Ratings downgraded French state debt to BBB+ from A- on Thursday, warning that French banks may soon come under strain.
“The work before us is immense. Nothing will be easy,” Socialist Prime Minister Jean-Marc Ayrault said, acknowledging that France’s financial situation is “difficult.”
The anti-immigration National Front party won two seats in Sunday’s election - the most it has had since 1988, when the political system was more favorable to extremist candidates. Party leader Marine Le Pen lost her quest for a seat in the industrial north by just 118 votes, but her 22-yearold niece - Marion Marechal-Le Pen - won her race in the southeast and will become France’s youngest lawmaker.
Sunday’s turnout of 56 percent was the lowest recorded in modern France.
Information for this article was contributed by Cecile Brisson, Sylvie Corbet, Thibault Leroux and Catherine Gaschka of The Associated Press.
Front Section, Pages 6 on 06/18/2012