After the sudden dissolution of his government, French president François Hollande is edging ever a bit closer to the political abyss. His prime minister, Manuel Valls, has just formed a new cabinet, which excludes three major socialist “rebels”: Arnaud Montebourg (economy), Benoît Hamon (education) and Aurélie Filippetti (culture). While various key figures, including former presidential candidate Segolène Royal, retain their posts, the net result is that the government’s political centre of gravity has shifted noticeably to the right.
Montebourg and Hamon were not only influential cabinet ministers; they had also made a Faustian bargain with Valls five months ago. In the aftermath of the spring’s calamitous local elections, both men gave their political backing to the new prime minister.
The dissolved government was an unholy alliance. The departed ministers come from the party’s soft left, whereas the former interior minister has long cultivated an uncompromising right-wing profile. Clearly Montebourg and Hamon hoped that going all-in with Valls would force Hollande to change his stand on Europe, and on the controversial “Responsibility Pact”.
A growing number of Socialist party faithful are openly decrying the austerity drive imposed by the European Central Bank, under the surveillance of Angela Merkel. They complain that it undermines people’s purchasing power, increases France’s public deficit, and has led to the rise of the extreme right.
As Montebourg put it in his farewell speech at the Economy ministry, austerity policies have “continued to mire the eurozone in recession and soon, deflation”.
He had a point.
Going nowhere fast
Despite all the pro-business and pro-market measures, the French economy has been in poor shape since 2012. According to INSEE’s economic forecast, the French economy will grow 0.7% this year, significantly below the government’s 1% forecast, while unemployment is set to rise to 10.2% by 2015.
Hollande’s Responsibility Pact was announced in January 2014. It aims to lower corporations’ labour costs in return for boosting recruitment, part of a swathe of measures to reduce unemployment. This effort represents a €41 billion cut to the levies firms pay on labour.
The French employers’ union, the MEDEF, has categorically refused to pledge it would create jobs in return. At the same time, Hollande has announced he would cut 50 billion from public spending by 2017 in a bid to rebuild confidence in the French economy.
Austerity measures are obviously unpopular. They have already left lower-salaried workers with less purchasing power, and there have been drastic cuts in public spending and public services. Tax cuts have drained the state’s revenue stream, so public debt has increased from 85.8% of GDP in 2011 to 93.5% in 2013. In reality, austerity has increased public debt and has been totally unhelpful to tackle the deficit.
The first Valls government was labelled a government of “guerriers” (warriors), an attempt to burnish the new team with a macho patina of unity and resoluteness. These were only words: it only took 147 days for the government to implode, one of the shortest periods in power for any French cabinet since de Gaulle founded the Fifth Republic in 1958.
And despite having an absolute majority in the National Assembly, the Socialist government remains weak. There is no political majority to back its economic policies; austerity is not only rejected by the left (Left Front and EELV – the Green party), but it is also increasingly criticised by various factions within Hollande’s notionally centre-left Socialist party.
Tellingly, most socialist “rebels” are not hard leftists; they are moderate social democrats, who are genuinely unconvinced that austerity is going to help restart the economy. They are also deeply disturbed about the political impact of Hollande’s policies after the party’s recent crushing defeats.
What’s more, there is every sign the situation is getting worse. Going by opinion polls, if there were a presidential election today, neither Hollande nor Valls would qualify for the second round. To make matters even worse for the Socialists, a disillusioned and angry popular electorate is abstaining en masse – and some, of course, have been voting for Marine le Pen’s far-right Front National.
But all this was entirely predictable. After all, Hollande’s government has been in perpetual crisis almost since he took office.
To be elected president of the French republic, Hollande pledged a break with five years of Sarkozysm. He promised to govern for the many who have been suffering from the economic recession; he was also committed, he said, to a more transparent and more collective style of leadership. None of this has been evident in his term so far.
With the so-called “rebels” removed from the government, the situation looks bleak – especially for those campaigning against austerity.
In an act of defiance, Valls has nominated Emmanuel Macron to the economy ministry. Before becoming Hollande’s deputy secretary general at the Élysée Palace, Macron used to work in the Rothschild Bank. He is a staunch partisan of austerity and of the pursuit of free-market policies.
In a stubborn bid for survival, Hollande (via Valls) has yet again dismissed his critics rather than engaging them. The president is not for turning, and neither are his opponents from his own party – but with no economic improvement in sight, the political crisis he faces can only get worse.
Philippe Marlière is a professor of French and European Politics at University College London (UK). On twitter: @PhMarliere.