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ORIGINAL FRENCH ARTICLE: Europe : François Hollande ne renégocie pas, il capitule

by Frédéric Durand et Clotilde Mathieu

Hollande and the EU : Downright Capitulation, No Renegotiation

Translated Sunday 14 September 2014, by Isabelle Métral

The staging was perfect: standing with a grim look in front of the journalists he had ‘urgently’ summoned on Wednesday morning, Finance Minister Michel Sapin delivered a message that was meant for the French people at large: the current economic crisis, he explained, ‘an exceedingly weak growth coupled with the slowing down of inflation’, is just as “exceptional” as the 2008 financial and banking crisis or the 2011 euro zone crisis. Having laid down the set, the minister pleaded in favour of a catastrophe scenario that ‘nobody had anticipated’ and that ‘foiled all our expectations’. Our minister’s left ear – which as early as April 2013 Thierry Lepaon, general secretary of the General Confederation of Labour warned was ‘blocked up’ - will have been utterly deaf to all the alarms that were sounded.

The catastrophe staging is poor cover for Michel Sapin’s real back-pedalling: on September 2 last he did not simply announce that owing to an exceedingly low inflation rate France would not meet the objective of cutting public expenses by 21 billion euro in 2015. More remarkably, he said raising the objective set for the reduction of public expenses was simply out of the question since ‘the situation barred adding more savings to the planned savings.’

So it came as a surprise (or half surprise) when the minister last Wednesday thought nothing of disowning his previous statement saying that ‘keeping expense down is an absolute necessity,’ and that the government would ‘meet the final objective of saving 50 billion euro by 2007, beginning with 21 billion euro in 2015.’ And he went on to announce ‘new measures’ to cut public expense by 2 billion euro. Which sectors are threatened with these new cuts will not be known until October 1 when the budget is presented to the Cabinet.

Conversely, the minister gave more ample details on the expected figures for growth: 0.4% this year against the expected 1%, and 1% against 1.7% for 2015. As well as on the public deficit which, initially, was expected to level off at 4% but will actually stand at 4.4%, thus putting off the 3% objective to 2017 instead of 2015. Clearly, the drastic 50 billion cuts will be of little help when it comes to delivering upon France’s obedient promises to Brussels.

It remains that the minister’s about-turn comes on the morrow of IMF President Christine Lagarde’s interview with the French business weekly Les Échos in which she urged France not to ‘change course’ as the rate set in each country for the reduction of the budget deficit seems to us appropriate.’

The executive gives proof after proof of his allegiance to neo-liberal policies

Following upon Michel Sapin’s declaration, Angela Merkel, a significant promoter of these austerity strategies, took advantage of the Bundestag debate on the 2015 budget to drive the point home : ‘A strict discipline regarding public expenses will be necessary, and what holds for Germany also holds for Europe. To stick to one’s commitments will be the hallmark of the euro zone,’ she warned.

The timing was really perfect. Waving the red rag of ‘budgetary discipline’ again and again serves one purpose only, namely an all-out effort at enforcing the social and economic neo-liberal model, the very model that is to pull down the last pillars of solidarity, social protection and labour rights : never mind that this option has proved self-defeating.

For despite the European re-orientation that François Hollande falsely claimed to be his aim, the executive has not ceased giving proof of his allegiance to EU’s neo-liberal policies. “We are not seeking to change EU’s rules, or to suspend them, nor any exception,’ Michel Sapin said on Wednesday. What clearer proof could he give of this allegiance? But there remains the blatant original sin, the socialist presidential candidate having pledged himself to renegotiating the Lisbon treaty.

‘The 3% drastic and dogmatic objective is once more put off. (…)And yet no government has gone so far and so brutally too to impose austerity and a decrease in social and public spending,’ the French Communist party declared on Wednesday. ’The infernal spiral that this strategy inevitably generates is to us crystal clear: it makes all recovery through investment, wages, or consumption impossible. Hollande, Sapin and Valls have got it all wrong from start to finish,” the PCF insists.

The original sin; the socialist candidate’s electoral promise to re-negotiate the Lisbon treaty has petered out.

Even the most moderate on the Left are dissatisfied with the situation: ‘Shouldn’t we reconsider the planned 41 billion euro tax exemption for companies, since its benefits would only be felt in the long term, and stick to the objective of cutting public expense whose depressive effect is immediate?’, publicly wondered Pierre-Alain Muet in a statement on Tuesday. Pierre-Alain Muet is a most reserved Socialist deputy (Translator’s Note: a pun on the deputy’s name, as “Muet” means “dumb”, as in "unable to speak"), who sits on the finance committee. To which Michel Sapin had said a resounding “No” that very morning : “My answer is ‘No!’ The pact voted in Parliament will be fully implemented and according to schedule. All in all the government and Parliament have pledged themselves, with the Tax Credit for Competitiveness [1], to cut contributions by 41 billion euro in four years. We shall stick to this line.”

French socialist deputy Karine Berger’s approach was more conciliatory. ‘The fight against deficits, she commented, must remain an objective, but it is not the main objective. The main objective, really, is to shield our continent and our country against recession and deflation.’

This however does not pull the rug from under the Right’s feet. Far from it. For the socialist government’s Rightist policies embolden it to ‘ask for more’: ’The Finance ministry’s declarations are astounding. (The government) has been lying to the French people and to its European partners for the last two and a half years (…) France cannot live on credit like this. There’s been no attempt at cutting spending,’ said Éric Woerth, former Budget minister under Sarkozy. ‘the Executive remains impervious to the economic approach that it deemed inferior to its own analyses and forecasts.’

The last episode in a long series of dissensions within the majority took place only a few days before the vote of confidence [2] that will definitively cinch the government’s neo-liberal line if Manuel Valls gets a majority of the votes. Speaking in the name of the group of Socialist ‘dissenters’, deputy Laurent Baumel put it clearly: ‘All this simply results from a policy that does not work. The government does not balk at fighting against the deficit, but it finds that it just cannot keep it down because the growth is nil.’

This might be proof of some deeper malaise than appears, in view of the deepening gulf between this obdurate executive and the vast, increasingly dissatisfied majority of its electors at each of its new decisions.

[1or CICE : this provides that all companies will get money from the Treasury to the amount of 4% of the total salaries paid in 2013, and 6% in 23014. See article 2532.

[2On Tuesday 16th

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