Opinions - 02.09.2014 - 00:00 

The new French government

An unpopular president, a government on call: little has moved in France since President Hollande took office. The resignation of the government is the latest symptom of a profound crisis. HSG Professor Vincent Kaufmann on late course correction and the one with the last laugh, Marine Le Pen.

1 September 2014. "The French government resigns" could be read in the media on 25 August. In most democratic countries this would mean that the government had lost a vote in parliament and had to resign. But who would want to disturb the French members of parliament during their sacrosanct August holidays? In France, the resignation of a government has nothing to do with parliament: it is hardly a parliamentary concern. After all, this is only about a modest government reshuffle that became necessary owing to ill-disciplined statements made by economy minister Arnaud Montebourg. This representative of the left wing of the Socialist Party made waves once too often and has to leave together with his accomplice, education minister Benoît Hamon. The new economy minister is Emmanuel Macron (an apt name for a highly technocratic office!), who used to work for the private bank, Rothschild, and does not appear to be (or is no longer) a member of the Socialist Party.

Reasonable economic policy

With his protectionist attitude and his endorsement of classic socialist economic recipes (higher taxes, higher government expenditure and correspondingly higher debts, which are supposed to be approved benevolently by the EU), Montebourg is decidedly no longer compatible with the middle to middle-left course set by prime minister Manuel Valls since April 2014. On the one hand, government expenditure is now intended to be (slightly) cut at last; on the other hand, the very high taxation on work is intended to be lowered in order to stimulate the competitiveness of the French economy – which according to Montebourg and the left-wing part of the left is simply tantamount to an inacceptable present to the patrons. Yet the economy minister is really only the latest victim of the French socialists’ recurring return to a reasonable economic policy. Since François Mitterand’s election in 1981, the same scenario has been repeated: the socialists start with a "generous" socialist programme, raise taxes, spend lots of money, run into debt, and take an average of two to three years to realise that this does not work. They then move on to a more "business-friendly" policy, which this time is embodied by Manuel Valls.

Late correction of course
But can Valls succeed at all, and can François Hollande still be rescued for the presidential election scheduled for 2017? A great deal of time has already been lost, and the course has probably been corrected too late. Even if the announced measures are obviously characterised by economic rationality and are even being supported by the French employers’ union MEDEF, it is doubtful whether they will bite deep enough. As long as France does not approximate the other EU countries in terms of government expenditure, but also working hours and pensionable age, it will simply remain unable to solve its problems. At some stage, spending more and working less than everyone else will no longer work in France, no matter how much the French love to invoke the “primacy of politics over the economy”.

Lack of legitimacy

What is decisive for the foreseeable failure of Hollande and Valls is primarily the fact that although the new government may be acting coherently at last, it has no legitimacy any longer. Hollande was not elected in order to implement a programme that could also be a middle-right programme. This may help him to neutralise the middle-right opposition, whose representatives no longer know exactly where they should position themselves with their own ambitions, but his electors will undoubtedly not be enthusiastic about Macron and are unlikely to vote for Hollande again. The left has taken over the exercise book of the right: the only person to be pleased about this is probably Mme Marine Le Pen.

Photo: Vente. /

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