French parliament backs permanent austerity, but it’s hardly a victory for Hollande

Despite mass protests and demands for a referendum on the matter, in the end President Francois Hollande will get his EU budget treaty through parliament.

On Tuesday, MPs passed the EU Fiscal Compact, or ‘permanent austerity treaty’ as critics describe it, by 477-70, with 21 abstentions. The Senate, which like the National Assembly, has a Socialist-led majority, will back it in a vote on Wednesday.

Tuesday’s vote against new rules engraving corner-shop style balanced budgets in stone included 20 socialist lawmakers, a majority (12 out of 17) of Greens, who are key socialist allies, the radical Left Front, plus 17 MPs from the main right-wing UMP party.

The yes vote drew support from the UMP, the centrist UDI of François Bayrou and Radicals.

The Socialist president insisted his allies on the left mustered enough votes by themselves to clear the measure, but the rejection of a hugely significant and controversial piece of legislation by so many within his majority so early on in his term provided strong ammunition both for competitors on his Left and for the Right.

Former Presidential candidate for the Left Front Jean-Luc Mélenchon criticized a government that ‘cannot act without the support of the right. There is no left-wing majority for the Merkozy treaty, even one packaged as Socialist,’  he said in a statement, referring to the treaty’s drafting by former French President and Chancellor Angela Merkel of Germany.

A key plank of Hollande’s election campaign was that he would change the treaty, which demands lethally strict spending limits with automatic penalties for offenders. But he failed, obtaining as a sop a weak ‘growth pact’.

A gloating former Prime Minister François Fillon stressed that the EU treaty ‘was adopted, word for word, as it was negotiated by Nicolas Sarkozy’. François Hollande had ‘buried the lie about renegotiating the treaty and this is good news for France and Europe,’ he said.

Opposition to the treaty in France includes 120 economists who last week published a letter in Le Monde criticising its ‘recessive logic’ and because it represented a ‘power grab’ by unelected, unaccountable EU institutions seeking to introduce a mechanism for bailing out the Continent’s insolvent banks.