French President Francois Hollande takes a hit in local elections, while the far right led by Marine Le Pen makes gains. Kirsty Basset reports on how austerity is reshaping France's political landscape.
Setting the stage for a comeback perhaps. Former President Nicolas Sarkozy's party won France's local elections at the weekend, and he's now confident it can take back power in 2017. (SOUNDBITE) (French) NICOLAS SARKOZY, PRESIDENT UMP PARTY, SAYING: "A change in the governing power is on the way and nothing will stop it." President Francois Hollande's ruling Socialists who've presided over a lacklustre economy and 10 per cent unemployment rate took a hit - and are set to lose just over half of the 61 regions held before the election. Jeremy Stretch is Head of FX at CIBC. (SOUNDBITE)(ENGLISH) JEREMY STRETCH, HEAD OF FX AT CIBC: "Clearly the voter is punishing Mr Hollande for his inability to create employment and maybe some of his pledges have come back to haunt him and I think without a turn in the employment cycle I think it's going to be very difficult for the Socialists to improve their electoral fortunes." Marine Le Pen's far right National Front gained 62 seats, from just 1, but were kept from winning control of any one region. (SOUNDBITE) (ENGLISH) JEREMY STRETCH, HEAD OF FX AT CIBC: "Economic weakness really has emboldened anti-establishment parties not just in France but across the whole of the euro zone and beyond that." The result was also duly noted by French Prime Minister Manuel Valls. (SOUNDBITE) (French) FRENCH PRIME MINISTER, MANUEL VALLS, SAYING: "The very high, far too high, results obtained by the far right remain more than ever a challenge for all those who believe in Republican values. This is a sign of a lasting upheaval of our political landscape and we will all need to draw lessons from it." Valls' government has vowed to introduce new measures to boost investment and tackle rising unemployment. But it may be too late to improve President Hollande's political fortunes. (SOUNDBITE) (ENGLISH) JEREMY STRETCH, HEAD OF FX AT CIBC: "The one element Mr Hollande doesn't have is time. And that's going to be the real critical point for him. He's probably going to be reliant on the broader euro-zone rebound dragging the tide of the French economy, more than any direct reforms he can put through in this electoral process." Data last week showed that while business morale in France was at its highest in three years in March, growth is not yet strong enough to prevent unemployment from rising further.