By Tom Gill
First the expected news: on Sunday the two main contenders for the French Socialist party’s primary elections for their Presidential candidate – Francois Hollande and Martine Aubry – have sailed through.
With almost all votes counted mid-afternoon Monday former Socialist leader Hollande had 39.2% of the vote, against 30.7% for Aubry, a former government minister who was the architect of the 35 hour week in the 1997 to 2002 Socialist government of Lionel Jospin. They now face each other head to head in the second round to be held next Sunday October 16.
Then the surprise: a radical newcomer Arnaud Montebourg, only two months ago credited with just 5% support, gained 17% share of the Socialists and non-party sympathisers who participated in the vote. Montebourg, a strong critique of (capitalist) globalisation has called for the state to take greater ownership of banks and wants crackdowns on tax havens.
The Socialist party’s “third man”, as he has been dubbed, is going to be a big headache for Hollande, because his supporters will naturally switch to the left-leaning Aubry.
Hollande, who has been presenting himself as a moderate centrist, is likely to count on the support of the 6% who voted for the right wing Manuel Valls, and will look to scoop the 7% who voted for his previous partner and the failed 2007 election candidate Segolene Royal.
There has been a justified bit of self congratulation all round.
There was a huge turn-out for the Socialists’ first open primary in which anybody who paid up one euro and committed to adheres to the “values of the left” could participate. The Socialist Party had said if it achieved 1 million then it was a success. In the end 2.5 million put their cross in the ballot box for one or other of the six candidates. The first televised debate in the campaign that kicked off in June 5 attracted million.
But there’s no time for mutual back-slapping. Over the next week both candidates will under pressure to address the massive issue of who will pay for the rapidly escalating bankers’ crisis in Europe – and now France itself.
The urgency for clarity on this issue has been accentuated by the bailout of Franco-Belgian bank Dexia which will saddle the French public, already facing tough austerity policies, with huge debts. Dexia has already been bailed out to the tune of Euros 6.4 billion (£5.5 billion) in 2008, and on Sunday came back for more. Euros 90 billion (£77 billion) in assets – an undefined amount of which is “toxic” – will be 36.5% guaranteed by the French taxpayer.
Dexia is the first Eurozone bank to be rescued in the unfolding sovereign debt crisis, and this has hastened plans underway for a huge recapitalisation process of all Eurozone banks at the cost of hundreds of billions of euros.
Hollande has been decidely vague about the banks and what to do about the Eurozone crisis.
As for Aubry, she supports the creation of “Eurobonds”, which would see more solvent Eurozone states take on the liabilities of those “periphery” Eurozone states like Greece that are about to default. She also wants to turn the European Financial Stability Facility – a EU government fund currently being used to bail out Greece and creditor banks – into a European Public Bank with capital of Euros 200 billion (£172 billion) but able to “leverage” up to Euros 2 trillion (£1.7 billion).
She also wants to see a programme of “grand projects” linked to renewable energy and high technology in order to relaunch growth, which will be key to helping Europe escape from economic and financial collapse. Keynesians as well as fans of European integration would no doubt applaud such a strategy.
But big questions remain about what, if any, popular control Socialists intend to propose over the reckless, now tottering capitalist financial system. And who is going to dig deep to pay for the European rescue.
For potential Socialist kingmaker Montebourg, the answer is clear: “We have no choice but to make the banks pay.”