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The Revolt Against Hollande
French President Francois Hollande is facing a revolt with the socialist party ranks over his government’s plan to slash public spending.
After his freshly appointed prime minister, Manuel Valls, presented details of a package of 50 billion euros ($69 billion) in cuts last week, socialists MPs slammed his austerity plan as “economically dangerous”, saying it would “kill off’” the economic recovery and jobs.
The latest figures released last month show unemployment in the Eurozone’s second largest economy at almost 3.35 million. The economy slid into recession in the first part of last year, barely grew for the whole of 2013, and is only expected to grow1 percent in 2014 and 1.5 percent in 2015. The austerity medicine dished out to Europe’s ‘periphery’ – Greece, Spain, Portugal and Ireland – is now being served up in the core of the Eurozone and the French patient is slowly dying too.
Writing in the name of 100 socialist parliamentarians who publicly aired their anger at the cabinet reshuffle earlier this month that put right-winger Valls in charge, a number of socialist MPs last week wrote to free-market fan Valls for his cuts plan to be scaled back.
Valls wants a freeze in social benefits in order to save 11 billion euros, and a cut to health spending worth another 10 billion euros. Local government spending will save a further 11 billion euros and state spending on administration is to be axed by 18 billion euros. Wages of state employees will be frozen until 2017.
The MPs, including allies of veteran left-winger Martine Aubry but also Hollande supporters, further demanded one billion euros spending to fund 50,000 jobs, tax reforms that help cut inequality and poverty, “serious and specific” commitments from businesses in exchange for a planned huge, 30 billion euros package of tax breaks, and the postponement of the EU’s punishing deficit target of 3%.
Under the weight of austerity-fuelled domestic and Eurozone economic woes, France’s deficit amounted to 4.3 percent of gross domestic product in 2013. Following EU economic rules put in place after the sovereign debt-banking crisis, Hollande promised last year to reduce the budget shortfall to 3.6 percent this year and 3 percent in 2015. He has utterly failed to stand up to the EU’s defacto imperial power, Germany and Chancellor Angela Merkel, as he had promised in his election campaign two years ago.
At local elections in March French voters got their revenge. The Socialists lost 155 towns to the right wing UMP party as their voters stayed at home, leaving turnout, at 62%, at the lowest ever for a French local election. Marine Le Pen’s nasty, anti-EU, anti-immigrant National Front won control of 11 town halls and the 7th district of Marseille, with a population of about 150,000, the party’s biggest win.
Laurent Baumel, one of the socialist MPs threatening not to back the proposals when they come to the vote next week, said the austerity plan did not reflect “the message we received at the polls.” With such unpopular measures, the socialists were “going in the wall.” Another socialist rebel Christian Paul said: “We were not elected to implement the loss of purchasing power.” A prominent critic, Senator Marie Noëlle Lienemann, said the austerity plan was an “economic aberration” based on the “dogma of lowering labor costs” and vowed to vote against it .
Unions are also up in arms about Valls’ austerity plan and a public sector strike has been called for May 15.
Force Ouvrière said it would “heavily penalize the most disadvantaged, and increase inequality, insecurity and poverty” and would “drag the French economy into deflation.” It added: “As we have stated several times, austerity is triply suicidal: socially, economically and democratically.”
“This government is hard on the weak and weak on the strong,” Thierry Lepaon, the head of the CGT union, added.
France’s economic problems are not just down to “fiscal” austerity – enshrined in successive EU treaties – but the monetary straight-jacket of sharing a currency with stronger economies, notably Germany, and dependence on the European Central Bank that sets interest rates for the entire 18 member state Eurozone. Last week finance minister Michel Sapin expressed once again the Hollande’s concerns that the Euro was overvalued. This hurts French exports at a time when austerity policies are slashing demand at home.
President Hollande, whose popularity has plunged to a record low, isn’t himself threatened since his mandate lasts until 2017. But his government depends on support in the National Assembly, where the Socialists have 290 seats against the 289 required for an absolute majority. They may have to rely on opposition votes or — more damaging — face an election if a vote on the austerity package fails.
Valls and Sapin were expected to present further details of the planned spending cuts to the cabinet Wednesday before taking it to Brussels under European Union rules to be signed off by faceless, unelected Eurocrats. The plan is slated for a vote in the French parliament on April 29.
Valls, who has been in office three weeks, has been trying to sell the plan to the French. Echoing the right-wing deficit hawks across the English Channel Valls said on France 2 television on April 16: “For more than 30 years we’ve lived beyond our means. I cannot accept it. The president cannot accept it.”
Tom Gill blogs at www.revolting-europe.com