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France's Macron gets boost from left as scandal-hit Fillon falters

By Ingrid Melander and Michel Rose

PARIS (Reuters) - French centrist presidential candidate Emmanuel Macron's election campaign took a step forward on Sunday as the Socialist party chose a champion with a hard-left agenda and the center right battled to contain a scandal over fake pay.

Thousands of supporters gave embattled conservative candidate Francois Fillon and his wife, Penelope, a rousing ovation at a rally in a show of support after his campaign was thrown off track by allegations of misuse of public funds relating to employment she carried out.

The ruling Socialists produced the last main candidate for the election, due to take place in April and May. They chose leftwinger Benoit Hamon for the ticket, a move likely only to boost the chances of winning for Macron, an independent.

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The 39-year-old ex-banker has been drawing big crowds with an agenda he says transcends the classic left-right divide.

A poll published on Sunday night showed Fillon, a 62-year-old rightwing former prime minister, had lost ground to Macron since the fake jobs scandal broke.

Although the Kantar-Sofres poll for Le Figaro newspaper showed far-right leader Marine Le Pen coming first in the April initial round, both Fillon and Macron were seen winning if either was up against Le Pen in the May 7 runoff. Macron would beat Fillon if the two were pitted against each other then.

"A runoff without Francois Fillon is no longer ruled out," Emmanuel Riviere of the Sofres pollster said. "What boosts Emmanuel Macron's momentum is above all Penelopegate."

Satirical weekly Le Canard Enchaine reported on Jan. 25 that Penelope Fillon had been paid thousands of euros as a parliamentary assistant for Fillon and his successor but that it could find no proof of her having done any work.

Until the scandal, Fillon had been the clear favorite to win the spring election. The allegations have dented his wholesome image of a devout Catholic and family man and appear to have hurt a campaign that has been fought on honesty and transparency.

Fillon has denied any wrongdoing and says his wife's jobs, which also included working for a cultural magazine, were not fake. Penelope Fillon has not yet responded to the allegations.

"They tried to sink us, they tried to shoot us down, but here you are!" a defiant Fillon told a cheering, flag-waving crowd that party officials said exceeded 13,000.

"I'm not afraid of anything; I've got a thick skin," Fillon said. His voice choking and with tears in his eyes, he said his Welsh-born wife had been at his side "from the beginning, discreetly and with dedication".

DEEP FRACTURES

The result of the Socialists' primary exposed deep fractures in the party and could consign it to the wilderness for the next five years or even lead to its breakup, analysts said.

Hamon, whom the Socialists choose as their standard-bearer in the election, pursues a program that includes introduction of a "universal income" to all citizens at a cost of 350 billion euros as well as a tax on robots.

After his victory against ex-prime minister Manuel Valls in the primary was declared, Hamon called on all left forces to unite behind him.

He said those included Jean-Luc Melenchon, a veteran campaigner of the hard-left who is standing again in this election and who carries a substantial group of voters with him. Melenchon himself has ruled out backing the Socialist candidate, but if he changes his mind, it would significantly boost the party's prospects.

Opinion polls have consistently shown that any Socialist candidate will pay the price for five years of deeply unpopular rule by President Francois Hollande and be knocked out in the election's first round.

Analysts say the choice of Hamon to the exclusion of the more centrist Valls means Macron will have a big group of middle-ground voters to aim at and a better chance of beating his close rivals on the right and far-right.

Fillon was keenly aware on Sunday night of the appeal the Macron phenomenon might have for some of his voters, especially since his own candidacy could now be in trouble.

"Macron represents Hollande's record," Fillon said in his speech to the Paris rally. "Macron above all is part of that elite that knows nothing about the reality facing our country."

(Writing by Richard Balmforth; Editing by Lisa Von Ahn)