Opening the way to fascist victory
Friday 12th September 2014
French President Francois Hollande’s recent purge of anti-austerity ministers could ultimately lead to a National Front government, writes Tom Gill
Francois Hollande is not a popular president. In fact he’s the most unpopular head of state in France since World War Two. The reason is that unemployment is stuck at a near record high and there’s little or no economic growth.
The right, the employers and their tribunes in the mainstream press say this is because he’s too much of a lefty. What the country needs is deep “structural” reforms that roll back the country’s large state and relatively generous welfare system. Free up the market, let capitalism flourish.
The left – which consists of a group of Socialist MPs, the radical Left Front and also the unions — say the opposite. Hollande has given in to the champions of neoliberal austerity in Brussels and Berlin and this economic mess is the result.
He got elected in 2012 on promises of standing up to German Chancellor Angela Merkel and the eurocrats. But he soon abandoned his pledges and has been looking right ever since.
The latest cabinet purge saw Hollande call in his Blairite Prime Minister Manuel Valls and eject three left-leaning ministers who wanted an end to the EU-backed austerity programme that has seen the economy flatline and the government’s popularity collapse.
The most outspoken was finance minister Arnaud Montebourg, who made his name as a critic early on in the Socialist government by rallying in favour of French industry against predatory foreign multinationals. He argued that the “incorrect” austerity policies followed by the European Central Bank and EU member states had “continued to mire the eurozone in recession and soon, deflation.”
Ahead of his ousting from the government, Montebourg told a Socialist Party rally: “France is a free country which shouldn’t be aligning itself with the obsessions of the German right,” which were leading France down a “blind alley.”
Education minister Benoît Hamon and culture minister Aurélie Filippetti also refused to take part in the new, more right-wing government that will seek a vote of confidence on September 16.
Filipetti said in her resignation letter to Hollande and Valls that the crisis meant people had become disillusioned with politics and “in the worst case is throwing our voters into the arms of the Front National.”
Indeed, the most recent polling shows, amid chaos in the mainstream right-wing UMP party, the neo-fascist Marine Le Pen would be elected in his place if an election were held now.
France’s economic situation is undoubtedly a mess — however by Greek or Spanish standards, Europe’s second-largest economy is still looking solid.
This is because the still considerable state sector acts as ballast stabilising the economy in bad economic times. Also Paris has not blindly followed the IMF-ECB-EU prescriptions that have wreaked so much destruction in the continent’s south.
But there’s no room for complacency. Hollande’s presidency is a slow car crash that will not only bring France but the whole euro house of cards down.
Already, cuts to public spending in France to fund huge corporate welfare programmes are having a severe impact and this is replicated across Europe.
The latest GDP figures published last month showed the eurozone stagnated in the second quarter with both France and Germany — which together make up 66 per cent of GDP output in the single currency area — struggling. Germany recorded a surprise 0.2 per cent GDP fall between April and June.
France is arguably the only country with enough clout to confront Germany and tell it that it’s got it wrong. But on Hollande’s record, the spectre of deflation will become a reality and France will in 2017 elect a National Front leader as president upon the ashes of the Socialist Party.
Some economists who might describe themselves as Keynesians say Germany has to be convinced — for its own as well as the continent’s sake — to launch a new Marshall Plan, a huge programme of investment to match the US project to revive a war-devastated western Europe after the second world war.
But this sounds like pie-in-the-sky thinking. Germany, despite some obvious eventual benefits for its economy, will not willingly fund the growth of its neighbours, at least not without adding to the already considerable control it now exercises over some of the weaker eurozone countries’ budgets.
For Jacques Sapir, an outspoken French economist, even with a determination to challenge the austerity dictats of Berlin and Brussels, France (and for that matter Greece, Portugal, Spain) cannot survive in the eurozone. The exchange rate, which is determined by the Frankfurt-based European Central Bank, works for Germany and some other highly productive northern European countries.
It cannot equally work for France and the Mediterranean where manufacturing has been massacred since monetary union at the end of the 1990s. This appears to be Le Pen’s conclusion too, and she has committed to withdraw France from the single currency.
But few on the left anywhere in Europe are facing up to this problem, and the real danger is that by ducking such a fundamental issue, they give the neofascist leader a political weapon that she will use to drive through racist immigration policies and a range of other authoritarian social and political measures.
There are lessons for Britain and Labour in all this.
The first is that austerity isn’t working. Expansionary austerity — the idea that cutting deficits, wages or welfare leads to growth — is a myth with no evidence to back it up. Each country that takes the prescribed medicine is not only destabilised economically and politically but spreads that destabilisation to its neighbours.
Wage cuts that started in Germany in the early noughties facilitated by deregulatory labour reforms were 10 years later enacted in Europe’s south and the pressure for more cuts is returning to Europe’s north. With incomes and spending power hit, inevitably growth eventually collapses. And when this happens social strife and the black shirts follow.
Second, we in Britain have lower unemployment (6 per cent, half the eurozone rate) and higher growth (3.2 per cent v 0 per cent in the second quarter) than most in Europe.
But this is not because of Cameron and Osborne’s austerity policies —which include creating what must be Europe’s largest precariat of workers on low wages and insecure, part-time jobs — but in large part because we have our own central bank that can better match monetary policy with the needs of the nation.
Third, taking the route of austerity (that is, cuts for the masses and hand-outs for the bankers and assorted rich) is a natural position for the right, but not for the left.
Progressive forces that pursue such policies will face political oblivion. The French Socialists sunk to a disastrous 14 per cent in the May local elections and are saddled with the lamest of lame-duck presidents.
If we don’t want to hand over the initiative and eventually power to the extreme right, the left has to come up with policies that respond to the real needs of ordinary people.
Tom Gill blogs at www.revolting-europe.com.