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France: As Hollande takes the social-liberal road, what prospects for the left?
France's Socialist Party President Francois Hollande with the Left Front's Jean-Luc Melenchon.
By Murray Smith
February 7, 2013 – KritiskDebat (Denmark ) and Links International Journal of Socialist Renewal -- It is just over seven months since the Socialist Party’s Francois Hollande capped his victory in the presidential elections by winning a working majority in the elections to the National Assembly.
It probably seems longer to him. It has been a hard half-year. Hollande won the election by standing on a program that was distinctly on the left by the standards of the Socialist Party. Partly this was to position himself as a clear alternative to his conservative opponent Nicolas Sarkozy. To a not insignificant degree it was to hold the SP electorate against the strongest challenge from the left for thirty years, in the shape of the Left Front (Front de gauche) and its presidential candidate Jean-Luc Melenchon.
Predictably, Hollande’s presidency has been caught between the hammer and the anvil. On an international level, the hammer is the ongoing pressure from European institutions, his fellow European leaders, the International Monetary Fund, the OECD… In France it is constituted by the right-wing and the employers’ organisations. The anvil is his electorate, the unions and the forces of the left, including within his own party.
The central issue has been from the beginning, and continues to be, the economic and social policies of Hollande and of the government headed by Prime Minister Jean-Marc Ayrault. Hollande came to power at the end of a campaign that had strongly displeased international capitalist circles, and on a program that displeased them even more. Not that they were worried that he might introduce any really radical measures. Simply, neither the campaign nor his program was centred on the need for austerity and structural reforms, the consensus among his European partners. Hollande was therefore out of line, and it was not immediately clear how far his actions in government might differ from his campaign promises.
Hollande was already under pressure to modify his program prior to his election. The pressures accentuated after that, on the international level and in France, where the main employers’ organisation MEDEF and its president Laurence Parisot stepped into the front line while the former governing party, the Union for a Popular Movement (UMP), now without Sarkozy, licked its wounds and engaged in a messy and inconclusive leadership election.
Hollande initially put up some resistance, keeping a few of his promises, notably a partial adjustment of Sarkozy’s pension “reform” of 2010. He stuck to his promise of a 75 per cent tax on France’s wealthiest individuals, which despite the relatively few people it concerned was like a red rag to a bull for his opponents. The tax was ruled unconstitutional (by the constitutional court) on a relative technicality. It would have been easy to reframe it, but that does not seem to be a priority.
Hollande also remained slightly out of line in terms of the objective of cutting the budget deficit to 3 per cent. He maintains the objective, but in his first budget raised twice as much by increased taxes as by spending cuts. He also maintained on the European scene a discourse on the need to balance deficit reduction with growth policies.
But overall his presidency is quite at odds with his campaign promises.
Just over a year ago, on January 22, 2012, Hollande launched his campaign with a major speech at Le Bourget, where he famously and eloquently designated finance as his main adversary. It would be an understatement to say that the reality of his government has not lived up to the rhetoric. At Le Bourget he declared that, without even waiting for the June legislative elections, he would “undertake, with the new ministers and the new government, the first measures against finance and for banking reform”. The projected law on banking reform was finally presented to the council of ministers on December 19.
The key measure promised at Le Bourget, a strict separation between retail banking and speculative activities, was explicitly ruled out by finance minister Pierre Moscovici in order to “preserve the French model of universal banks”. Other promises such as French banks not operating in tax havens, banning of toxic financial products, stock options and excessive bonuses, were missing from the projected law, though some may be the subject of amendments. Hollande also promised to impose financial penalties on companies that did not respect wage parity between men and women employees. This measure was notably absent from the plan for equality between men and women presented on November 30 by minister for women’s rights Najat Vallaud-Belkacem.
On a European level Hollande announced that he would propose a new Franco-German treaty. Neither before, during nor since the lavish celebration of the 50th anniversary of the original treaty did such a proposition surface. As for his promise to “act in favour of the creation of euro-bonds in order to pool debt and finance major projects”, it has disappeared from view since he came up against the reality of opposition from a number of European governments, above all Germany .
In fact it is on the reality of neoliberal austerity policies on the European level that Hollande made his first major capitulation. The Treaty on Stability, Coordination and Governance (TSCG), better known as the Fiscal Pact, which fixes fiscal austerity in law and in some countries in the constitution, had been signed under Sarkozy, and had to be ratified by 12 signatories to become effective, which it did on January 1, 2013. Hollande had announced during his campaign that he would not sign unless he succeeded in renegotiating the treaty. He did not succeed and indeed scarcely seems to have tried, contenting himself with a text on growth agreed at an EU summit, which was a mere sop. On this basis he announced that he would ask parliament to vote for the treaty, which it duly did last October. The adoption of the text was opposed by a campaign involving the Left Front, trade unions and associations such as ATTAC (Association pour la Taxation des Transactions financière et l'Aide aux Citoyen ; Association for the Taxation of financial Transactions and Aid to Citizens). Furthermore, 20 Socialist Party members of the assembly voted against, as did most deputies from the SP’s ally in government, EELV (the Greens) and nine abstained. This was not an isolated incident, but the manifestation of opposition within the Socialist Party towards the evolution of Hollande’s policies. We will come back to that.
The 2013 budget was criticised from both left and right. From the left because it involved cuts in public spending, from the right because it comprised one third cuts, two-thirds tax increases. There is certainly a greater willingness by the government to use taxation to raise money, including making the rich pay rather more. Nevertheless the government is committed to cuts of 60 billion euros over its five-year term, and it seems that this will especially involve cutting subsidies to local and regional authorities, resulting in cuts in services and/or increased indebtedness of these authorities, in effect shifting the burden of debt from central government onto local authorities.
Struggle over bosses’ right to sack
The major issue over recent months has been the question of employment legislation. The government fixed the objective of a”social summit” between government, unions and employers’ organisations. From the very beginning the employers, led by the MEDEF, went on the offensive, backed by a specific intervention by the bosses of France’s biggest companies. The offensive was conducted in the name of “competitiveness” the new mantra of the employers in France and elsewhere in Europe. The aim was to reduce the cost of labour and increase flexible work. They demanded measures specifically aimed at weakening job security, which is greater in France than in most other European countries.
The discourse goes like this: unemployment is high, because it is hard for employers to sack workers, therefore they don’t hire them. If it was easier to sack workers, employers would hire more and unemployment would fall. The reality is that the employers’ objective was to obtain ever more flexibility up to and including the right to sack workers for economic reasons without justification. To achieve this, they need to dismantle protective labour laws. They also demanded that employers’ social contributions be reduced and that the revenues be made up by taxation, in particular the indirect value-added tax (VAT).
In dealing with this question, the government first of all commissioned a “report on French competitiveness” by Louis Gallois, former CEO of the multinational EADS. The report was delivered at the beginning of November and it went far to meet the demands of the employers, both as regards the transfer of social charges onto taxation and in accepting the need to reform labour law to make it easier to lay off workers. The report met with a positive reception from the government. Subsequently, after lengthy negotiations a “national inter-professional agreement” (ANI) on reform of the labour market was signed on January 11, 2013, between the MEDEF and three trade union organisations (CFDT, CFTC, CGC) representing a minority of workers (less than 40 per cent).
It contains a few secondary concessions such as one or two workers on the administrative councils of companies with more than 5000 workers (of which there are only 200 in France) and measures to encourage companies to hire young people on permanent contracts. But the core of the agreement was to enable employers to conclude agreements in workplaces allowing them to impose wage cuts and reductions in working time whenever they see fit (supposedly to save jobs), and subsequently to sack any worker who refuses these conditions without him or her having any legal recourse. To conclude such agreements, it will be necessary to have the support of at least 50 per cent of elected workers’ representatives. This means that agreements will not be made everywhere, but they will be made, and at the local level making it possible to get round national and industrial agreements. These agreements would also make it easier for employers to sack workers collectively for economic reasons.
The main union confederation, the CGT, as well as Force Ouvriere, Solidaires and the FSU opposed the agreement. Now the government has announced that it will propose giving the “national inter-professional agreement” the force of law in March. Between now and then there will be a campaign against it by the unions and the left. Within the SP, one of the main left currents, Maintenant a Gauche (“Now to the Left”) has already expressed its opposition to the agreement.
The argument about competitiveness is central to the employers’ offensive, and competitiveness is reduced to a question of wage levels and labour flexibility. The cost of labour is central to their discourse, the cost of capital (generous dividends …) is never posed. This premise is accepted by the government, and of course by the right, as well as by most of the media and some intellectuals. It has however been widely contested by organisations like ATTAC and the Fondation Copernic and by many economists. Assuming for the moment that competitiveness should be an objective, it can be demonstrated that the gap in productivity between, for example, French and German industry owes more to questions of technology, research and development and to a less well-qualified French workforce than to wage levels. In fact, in his 74-page report Louis Gallois himself touched on such questions.
Opposition to austerity
It now seems clear that after some initial hesitations and a few steps to the left, the overall direction of the Hollande administration is towards acceptance of austerity and structural reforms. In a document of orientation adopted by the Left Front on January 25, the characterisation is unambiguous: “Today the government is quite consciously implementing social-liberal policies.” It is not the same as the right in every detail, but the central thrust is clear; any measures such as more equitable taxation, some funds allocated to job creation, etc. will be secondary. It is clear that now only considerable pressure from below in the form of strong social movements can begin to inflect the course of events. But it needs to be backed by a political alternative.
There are plenty of signs of discontent. This is centred to a large extent on the defence of jobs. At the centre of this is the fight to save the Arcelor-Mittal steel plant at Florange in Lorraine and resistance to the projected closure of the Peugeot car factory at Aulnay in the Parisian region. But there are also battles against closures, redundancies and worsening of conditions at Goodyear, Renault and elsewhere. Workers have reacted by strikes, demonstrations and even occupations, with a link-up between the CGT and unions in Belgium, where Arcelor-Mittal is also making large-scale lay-offs and closures.
But the response has also to be political. The question has been posed of nationalisation -- at least temporarily, to find another employer willing to take over the sites of companies threatening to lay off workers or close factories. Not only by the unions, but last autumn by Arnaud Montebourg, minister of industrial renewal, who threatened not only to nationalise Florange but declared “we don’t want Arcelor-Mittal any longer in France”. Montebourg was quickly disavowed by the government and almost resigned. This was one more choice which showed which way the government was going. But the question of nationalisation has not gone away. In the public sector there have also been strikes and demonstrations by teachers and civil servants.
It is difficult to predict how significant or how successful working-class resistance will be. Battles against redundancies and factory closures are notoriously difficult to win, and when they do win, the mobilisation of public opinion is often crucial. Hollande’s approval ratings have fallen sharply, to around 35-40 per cent. The right and the media like to think that this is because he is “not decisive enough”, not competent on the economy, etc. That is far from clear. It can also be that many who voted for him are disappointed with the gap between promises and reality. When Montebourg advocated nationalising Florange, his approval rating went up to 63 per cent. In terms of broader social attitudes, a poll conducted by the IFOP institute in January 2013 showed that 64 per cent of those questioned considered that the class struggle is a reality in France today – that is 25 per cent more than in 1964. And a majority, virtually the same as in 1964 and in the 1980s, considered that they themselves belonged to a class. This came, by the way, a couple of days after Jerome Cahuzac, junior budget minister, had declared in a televised debate with Jean-Luc Melenchon that he had never believed in the class struggle…Realism is not always where they say it is.
There are other issues, outside the economic and social sphere, where the government has more room for manoeuvre. The central societal issue today is the debate around a government proposal to legalise same-sex marriage. This has polarised French society, with mass demonstrations for and against. It is very much a left-right confrontation. Opinion polls show 63 per cent in favour of same-sex marriage. But actually the biggest demonstration was one against, indicating the virulence of the opposition. However the government is holding firm and has comfortably won the first key vote on the issue in parliament. It seems that its proposal will in fact become law.
On another question the situation is less clear. One of Hollande’s campaign promises was to give resident foreigners the right to vote in local elections. Promising this measure and then quietly burying it has become something of a tradition for the Socialist Party. It was first promised in 1981 by Francois Mitterrand and never implemented and since then it has been regularly promised and regularly forgotten. A couple of weeks ago it seemed very likely that history would repeat itself. Nothing had been heard of the proposal for months. However, it has suddenly been put back on the agenda by Ayrault. The problem is that since it is a question of a constitutional reform, it requires a three-fifths majority in parliament, which the government does not have. It would need 30 to 40 votes from the opposition, which does not appear a priori to be likely. The explanation of Ayrault’s initiative may be that there are some other measures of a constitutional nature in the pipeline, some of which would be acceptable to some opposition deputies. The plan would therefore be to vote all the measures as a package -- but for the moment that is just speculation. In any case, since at present 56 per cent of the population say they are opposed to the measure, a campaign to win over public opinion would be necessary.
A jump in Hollande’s popularity has come from an unexpected source. Since the beginning of 2012 the north of Mali had fallen under the control of jihadist forces. At the beginning of this year they began to move towards the south of the country where 90 per cent of the population live. On January 11, French forces intervened, stopped the jihadists and are in the process of driving them out of the towns in the north.
To deal with all the complexities of the situation in Mali would go well beyond the scope of this article. Many things could be said about French economic interests in Africa and in the Sahel in particular. Many things could be said about the dozens of French military interventions in Africa over the last 50 years, mostly to back up pro-French regimes, often dictatorships, threatened with being overthrown. France has maintained a neocolonial relationship with most of its former colonies and the web of economic interests and politico-military intervention has become known as the Francafrique system. It should be added that this system has remained intact under governments of left and right.
Having said that, and bearing in mind that the French intervention was not motivated by pure respect for human rights but by the desire to restore order in its backyard and defend French interests, the jihadist regime in northern Mali was extremely repressive and indeed barbaric, and hated by the populations under its control. Thus, the French intervention was very popular in Mali, among the 100,000 strong Malian population in France and in French public opinion. Hollande’s approval rating went up immediately from 40 to 44 per cent. We will see how long that lasts, but for the moment he faces very little criticism for the decision to intervene, only on questions concerning the timescale, the precise objective, the political situation in Mali, ethnic tensions, human rights violations by the Malian army, etc.
The right, with a few exceptions such as former prime minister Dominique de Villepin, has approved the intervention. Much more circumspectly and conditionally, so has most of the left, including with a few exceptions, the components of the Left Front.
In a European Union and a eurozone today in crisis, less acute than this time last year but far from over, France occupies a place apart. Within the eurozone, there is the Northern bloc: Germany, the Netherlands, Finland, Austria and Luxembourg. There is the so-called periphery, including most of the other members in the south and east, among them Italy, Spain, Greece, Portugal. Between the two there is not much: there are really only France and Belgium, neither entirely part of the dominant bloc nor part of the periphery. France in particular is important for two reasons: first of all it is the second-biggest economy in the EU, fifth in the world; second, it is undoubtedly the major country where there has been the greatest resistance to neoliberalism, something not unrelated to deep-seated egalitarian traditions originating in the French Revolution and to two centuries (and more)of popular struggles. If France is brought into line, if the left and the popular forces are defeated, it would be a victory for neoliberal Europe not only in economic terms, but politically and ideologically.
It is not only on the question of votes for foreigners that history may repeat itself. Three times already we have seen the same scenario, in 1981-86, 1988-93 and 1997-2002. A Socialist Party-led government has come to power, has ended up applying policies that have disillusioned and demoralised its supporters, and the result has been the return to power of the right five years later.
Why should it be different this time? How can the victory of a right that is now closer than ever to the positions of the far right be prevented? In the first place, it is necessary to have a powerful social movement to resist attacks. It is too early to say that there will be such a movement, although there are plenty of signs of militancy and resistance. But there were, actually, under previous left governments, sometimes quite big struggles – steel workers in 1984, public-sector workers under the Lionel Jospin government.
What has always been missing is an alternative on the left. The Communist Party was in government in 1981-84 and 1997-2002. The far left was never a credible alternative. Potential left forces in the SP had no allies outside. In other words the left was divided and ineffective. With the rise of the Left Front, that is no longer the case. That does not guarantee victory, but it improves prospects.
After the election campaigns of 2012, the Left Front was faced with the challenge of intervening in a situation where the left in the form of the Socialist Party was in power, and where it became increasingly evident that it was not going in the correct direction. There were two problems: how to position itself and what initiatives to take. On positioning, there was a refusal to simply fall back on denouncing the SP and proclaiming the Left Front a left opposition. There was some hesitation and even a bit of cacophony as to the relationship of the Left Front to the presidential majority – part of it, not part of it? That seems to have been effectively resolved.
The Left Front considers itself to be part of the popular majority that elected Hollande – without its 4 million votes he would not have won – and therefore to have its say on where the government is going. It is not part of the government majority and combats many of its policies. It does not want to overthrow the government, it wants it to change policy, to abandon austerity, to start to break the power of finance and implement policies in the interest of the popular majority. In terms of initiatives, and linked to the question of positioning, there was a period of hesitation/reflection in autumn 2012. After the very successful 80,000-strong demonstration on September 30 against the signing of the Fiscal Pact, there was a pause. But the Left Front is now on the offensive again.
On January 23, 2013, it held the first of a series of big public meetings in Metz, near the Lorraine steel country. The attendance at 1500 was very encouraging for a non-election period, and trade unionists, including from Florange, spoke alongside Left Front leaders. On January 25, the Left Front adopted, with unanimity among its components, a document of orientation entitled “Let’s impose an alternative to austerity”. This was followed a couple of days later by a document on the functioning of the Left Front, including maintaining and developing the involvement of people not members of any of its component organisations.
The alternative proposed by the Left Front will certainly get an echo. It will be involved in a whole series of struggles and social movements over the next period and it may do well in the municipal and European elections in 2014. But by itself it will not constitute an alternative in the sense of an alternative government. For that to happen there must be movement in the parties making up the governmental majority, especially the Socialist Party, but also EELV.
From this point of view there is movement. The vote against the Fiscal Pact was not a flash in the pan and there are now several organised currents on the left of the Socialist Party. The main one is probably Maintenant a Gauche, whose leaders are Emmanuel Maurin and senator Marie-Noelle Lienemann. A new group was announced on January 24, la Gauche forte (“the Strong Left”), which has seven deputies and senators. There is also the start of a dialogue between the Left Front and the left of the governmental majority. In mid-December 2012 there was a debate involving Maurel, Lienemann, Paul Laurent (national secretary of the Communist Party) and representatives of the Left Party and EELV. It will not be the last.
It would be unwise to be carried away by optimism. But just a few months into the Hollande presidency, the left that refuses austerity and neoliberalism has never looked so strong. A combination of mass struggle, political battles in parliament and debate within and among the parties of the left can make it for the least much more difficult for Hollande to pursue the course he has embarked on.
 Most of what has been written about competitiveness is in French. There is one good article in English: ”Competitiveness: victory goes to the pack” by Charles Aubin, which deals comprehensively with the issue, particularly the comparison between France and Germany. Available at http://www.internationalviewpoint.org/spip.php?article2817.