The presidency of François Hollande began on 15 May 2012 when the Constitutional Council announced the official results from the presidential election during his inauguration and ended on 14 May 2017 when Emmanuel Macron was officially inaugurated as the 25th President of France. Hollande, a leader of the Socialist Party, worked alongside Prime Minister Jean-Marc Ayrault until 2014 then Manuel Valls until 2016 and finally Bernard Cazeneuve until the inauguration of Macron in 2017.
Hollande's presidency was dominated by the rising unemployment rate, the protests against reforms of the Labor code including the El Khomri law and the fight against Islamic Terrorism, mainly against the ISIS.
François Hollande declared in December 2016 that he was not going to run for a second term following low approval ratings. He was succeeded by former Minister of Economy, Emmanuel Macron.
Domestic policy
Economy
The key economic focuses for François Hollande were the rising unemployment rate, income inequality and the deficit.
François Hollande said he underestimated the economic crisis when he first came into office, the first Budget of the Hollande presidency included several tax measures that were badly received mainly due to the increase in the taxation of capital gains. The increase meant that an entrepreneur who sold their company after 10 years would have to pay a 45 percent income tax rate, plus 15.5 percent in social contributions, so amounting to over 60 percent in tax. A movement labelled "les pigeons" was launched by entrepreneurs opposing the new tax measure. Hollande also abolished the increase on VAT that Sarkozy introduced though he later said that he regretted his decision.
A tax increase was introduced by Jean-Marc Ayrault to make up for the public deficit, the tax was estimated to create a revenue of 30 million euro a year, this was later reversed in favor of the creation of tax credits to make the economy for competitive. Eventually supply side economics was adopted by the government and taxation was lowered after poor performance and tax migration by individuals with higher incomes, including Bernard Arnault.
Employment was one of the key focuses for Hollande, he set an objective reversing the rising unemployment by the end of his first term. By the end of Hollande's term, unemployment had increased by 25%. By Q3 2015, unemployment was at the highest level in France since 1997. The Ayrault government put forward several plans to try to curb the youth employment including Law 2012-1189 which aimed to help young people with a lack of employment due to no training. This created the "emplois d'avenir" which gave young people between the ages of 16 and 25 contract ranging from one to three years in the public sector.
In March 2013, proposal no. 33 otherwise known as "contrat de génération" was introduced with the intention to find young people long-term contracts and make it easier for them to integrate into the labor market while securing the jobs of anyone above the age of 55. The proposal offered a €4000 subsidy to firms under 300 employees that employed anyone under the age of 26 without firing anyone over 57 while businesses with over 300 employees would need to produce a plan with the help of a trade union. The plan led to Disneyland Paris planning to hire over 600 under 26's by 30 September 2016 and Renault taking on 2000 young people a year under student contracts and 800 young people permanently. The proposal will cost €920,000 by 2016.
The El Khomri Law, which sought to make it easier for companies to lay off workers, reduce overtime payments for hours worked above the 35-hour work week and reduce severance payments that workers were entitled to if their company had made them redundant was passed in August 2016. The law was intended to make France's economy more competitive.
During the 2012 presidential election, Hollande said he wanted to reduce the government deficit to 3% of GDP by 2013. He attempted to do this by raising taxes and cutting public spending. In 2013, Hollande postponed the objective to 2014 following rising unemployment and slow growth. In 2014, Hollande announced a plan to reduce spending by 50 billion euros between 2015 and 2017. The draft budget for 2016, announced in October 2015, showed a continued freeze on the wage of civil servants, a decrease in grants to local and regional governments, a reduction in the public sector wage and a reduction in taxes for most tax brackets. The deficit reached 3.5% of GDP in 2015. The 2017 budget announced a target for the deficit to reach 2.7% of GDP. The government's fiscal oversight committee, The Council of Public Finances said this was "unlikely."