Exclusively in the new print issue of CounterPunch
GOD SAVE HRC, FROM REALITY — Jeffrey St. Clair on Hillary Clinton’s miraculous rags-to-riches method of financial success; LA CONFIDENTIAL: Lee Ballinger on race, violence and inequality in Los Angeles; PAPER DRAGON: Peter Lee on China’s military; THE BATTLE OVER PAT TILLMAN: David Hoelscher provides a 10 year retrospective on the changing legacy of Pat Tillman; MY BROTHER AND THE SPACE PROGRAM: Paul Krassner on the FBI and rocket science. PLUS: Mike Whitney on how the Central Bank feeds state capitalism; JoAnn Wypijewski on what’s crazier than Bowe Bergdahl?; Kristin Kolb on guns and the American psyche; Chris Floyd on the Terror War’s disastrous course.
Time for European Disobedience?

Sacking Sarkozy Won’t Be Enough

by SERGE HALIMI

Will the French elect a different president, but leave unresolved all the issues raised in the election of 2007? The French would welcome a change of government: because, apart from President Sarkozy’s egregious shortcomings — his ubiquity, his exhibitionism, his endless capacity to contradict himself, his fascination with the rich, and his tendency to blame all shortcomings on the unemployed, immigrants, Muslims and civil servants — there has been a decline in democracy and the sovereign power of the people during his presidency.

After the May 2005 referendum, the two leading presidential candidates ignored the fact that most French voters were against the creation of a European edifice whose basic flaws have since become clear. Yet the 2005 vote was taken after an uplifting national debate, unlike the current election campaign. And Sarkozy’s presidency, which was supposed to herald the return of voluntarist policies, is ending with some puzzling statements. All the leftwing candidates accuse the banks, but the French finance minister, François Baroin, claims that “blaming finance is as silly as saying ‘I’m against rain’, ‘I’m against cold weather’ or ‘I’m against fog’.” And the prime minister, François Fillon, told the Socialist candidate, François Hollande, that he should “get Standard and Poor’s to rate his election manifesto” (1).

The sovereign power of the people has been undermined by the meek acceptance among the French political establishment of the market democracy mantra of Germany’s increasingly arrogant right wing. This issue is central to the current campaign, and is directly connected with the European debate. The austerity measures so passionately pursued for the past two years have not had — and will not have — any effect on the debt they are supposed to solve. Any leftwing strategy that does not question this financial orthodoxy is doomed. But the current political climate in Europe precludes any possibility of achieving this aim without a struggle.

At present, the general breakdown is contained by floods of money which the European Central Bank (ECB) lends to the private banks at low rates, and which the banks then lend back to the state at higher rates. But this brief respite depends on the whim of the ECB, entrenched in an “independence” rashly specified in the treaties. In the long term, most of the member states have undertaken, in response to German demands meekly passed on by Paris, to take even tougher measures and to impose sanctions on any member that fails to comply, in accordance with the Treaty on Stability, Coordination and Governance (TSCG) currently in the process of being ratified.

The punishment already inflicted on Greece is about to be extended to Spain, which has been ordered to reduce its budget deficit by a third, although unemployment is already at 22.8%. Portugal is not far behind, required to cut public spending although the rate of interest on its borrowing is rocketing (14% in March) and it is in deep recession (-3% growth in 2011). Tightening the financial screws on states with mass unemployment was the great economic and social panacea of the French right in the 1930s. As the Socialists explained at the time: “Deflation worsens the crisis, it stifles production and it reduces tax revenues” (2).

The stupidity of the current policies only upsets those who still imagine they are intended to serve the general interest and not the oligarchs who pull the strings of the state. If finance has a face, this is it (3).

The first priority

If there is a change of government, the new president’s first priority must be to question the TSCG (and other similar austerity measures). Success or failure in this will determine everything else: education, public services, fair taxation, employment. François Hollande would like to separate European solidarity, which he supports, from financial shock therapy, which he opposes. He has promised to “renegotiate” the TSCG, hoping to add “a section on growth and employment” with industrial projects at a continental level.

Yet Jean-Luc Mélenchon, the Left Front candidate, considers that “no leftwing policy is possible within the framework of these treaties.” Not surprisingly, he is against the TSCG and the European Stability Mechanism (ESM), which provides financial assistance for countries at risk that have agreed to draconian measures to balance their budgets. The Greens’ candidate, Eva Joly, and the Trotskyist candidates, Nathalie Arthaud and Philippe Poutou, are also campaigning for a “European audit of public debts”, or even to have them cancelled on the ground that the current level of such debts is due to the low taxes levied in the past 20 years and the interest paid to creditors.

Most European states, with Germany in the lead, are against renegotiating the treaties and will not hear of this, or of lending substantial sums to states in financial difficulties unless they have given assurances of “good” management (further privatisation and a review of important social security provisions — pensions, unemployment benefits, the minimum wage). The president of the European Central Bank, Mario Draghi, summed it up in an interview with The Wall Street Journal on 24 February: “There was a time when [it was said] that the Europeans [were] so rich they [could] afford to pay everybody for not working. That’s gone.” Draghi, who used to be vice-president of Goldman Sachs, added that “good” austerity would mean lower taxes (a measure that no French candidate, not even Sarkozy, is proposing) and lower public spending.

A leftwing president would immediately face opposition from most EU governments, who are almost all conservative, and from the ECB, the European Commission and its president, José Manuel Barroso. The British, Polish and Italian prime ministers, like the German chancellor, have deliberately refused to meet the French candidate, leading in the opinion polls but judged to be less malleable than the current president.

The Netherlands finance minister, Jan Kees de Jager, has already said: “We are certainly not in favour of renegotiation. But if Mr Hollande wants more reforms, we will be with him when it comes to liberalising services or reforming the labour market.” The Netherlands will support any leftwing French president whose policies are even more neoliberal than Sarkozy’s.

The view from Germany

While Angela Merkel has signified her willingness to participate in meetings of the French right, the German Socialists are less enthusiastic about their comrades on the other bank of the Rhine. The SDP leader, Sigmar Gabriel, has espoused their cause but another leading member, Peer Steinbrück, who hopes to succeed the chancellor next year, considers that Hollande’s commitment to “renegotiate all these [European] agreements yet again” was “naive”. He anticipates a change of heart: “If he is elected, his policy could turn out to be very different” (4).

Indeed, this cannot be ruled out. Before the parliamentary elections in 1997, won by Lionel Jospin, the French Socialists promised to renegotiate the Amsterdam European Stability Pact — an “absurd concession to the German government”, according to Jospin. Once in power, all the French left managed to achieve was to get the words “and growth” added to the title of the pact.

Hollande’s campaign manager, Pierre Moscovici, returned to semantics in 2003: “The Treaty of Amsterdam had been negotiated — very badly — before we took over. It had many defects — the social content left much to be desired. … The new government could easily have refused to approve it … or at the very least asked for the negotiations to be resumed. We chose not to do so [Moscovici was minister for European affairs at the time]. With Jacques Chirac in the Elysée, we were facing a three-fold crisis. A Franco-German crisis, because any retreat on our part would have complicated our overall relations with that essential partner… A crisis with the financial markets, where the operators wanted the treaty to be adopted. … And lastly, a cohabitation crisis. … Lionel Jospin quite rightly chose to change tack, with a view to keeping his options open and eventually coming out on top. That is to say, getting the first European Council resolution on growth and employment in return for agreeing to the Treaty of Amsterdam” (5). Read that, and you have to wonder what will happen if Hollande wins in May.

Should the left win the presidential and parliamentary elections, the picture would differ from that earlier outline. The French executive would not be divided as it was 15 years ago; but the political balance in Europe, which was centre-left in 1997, is now predominantly rightwing. That being said, even Spanish prime minister Mariano Rajoy’s deeply conservative government has reservations about the austerity imposed on it by Germany. In March, it announced its “sovereign decision” not to accept the European budgetary straitjacket.

At the same time, a dozen other countries, including Italy, the UK and Poland, called for a review of the Franco-German economic policy. Hollande has reason to be cheerful. He hopes that his election would upset the balance of power in Europe and that that he would be able to avoid a trial of strength with a number of European governments, the ECB and the Commission in Brussels.

But the new direction the neoliberal countries want has nothing to do with the changes he recommends. To some, “growth” means the Thatcherite package (low taxes, social and environmental deregulation); to others, a small range of public investments (education, research, infrastructure). The ambiguity cannot be maintained indefinitely. We shall soon be forced to consider “European disobedience”, as recommended by Mélenchon and other leftwing forces. Or continue on the present course, without any hope of relief.

Apart from their differences — on fair taxation, for example — Sarkozy and Hollande have both supported the same European treaties, from Maastricht to Lisbon. They have both endorsed the targets set for reducing the national deficit (3% of GDP in 2013, 0% in 2016 or 2017). They are both against protectionism. They both think growth will cure all ills. They support the same foreign and defence policies (the French Socialists no longer challenge Sarkozy’s decision to bring France back into Nato’s military command structure).

The time has come to break with all these premises. A change of president is an essential condition for this. But the record of past leftwing governments and the current campaign suggest that that will not be enough.

SERGE HALIMI is director of Le Monde Diplomatique. He has written several books, including one  on the French press, Les nouveaux chiens de garde and another on the French left in the 20th century – Quand la gauche essayait – both are fine works.  He can be reached at Serge.Halimi@monde-diplomatique.fr

Notes.

(1) Respectively RTL, 22 January 2012, and Le Journal du dimanche, Paris, 15 January 2012.

(2) Preamble to the Socialist group’s 1933 draft budget law.

(3) In January Socialist candidate François Hollande said: “My true adversary has no name, no face, He will not be elected, yet he governs. My enemy is the world of finance.”

(4) Agence France-Presse, 15 February 2012.

(5) Pierre Moscovici, Un an après, Grasset, Paris, 2003, pp 90-91.


This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.