French socialist revolt continues

The revolt in France’s socialist party continued this week as details of a fresh austerity plan were unveiled by new Prime Minister Manuel Valls.

Valls has announced a 50 billion euro austerity plan to be funded largely by cuts to pensions, a freeze in public servants’ salaries and cuts to public services.

The announcement was “received as a slap in the face by some Socialist MPs who expected at least a gesture to the left”, L’Humanite reported. However, the majority are expected to back the plan when it goes before parliament next April 30, despite the pounding the party received in local polls late last month amid a tightening of the austerity screw.

In the latest sign of dissent among the ruling party’s ranks, MPs wrote on Wednesday to the Prime Minister describing his austerity plan as “economically dangerous”, saying it would “kill off'” the economic recovery and jobs.

The latest figures released last month show unemployment in the Eurozone’s second largest economy at almost 3.35 million. The economy slid into recession in the first part of last year, barely grew for the whole of 2013, and is only expected to grow 1 percent in 2014 and 1.5 percent in 2015. 

Saying they were writing in the name of 100 parliamentarians who publicly aired their anger at the cabinet reshuffle a fortnight ago that put right-winger Valls in charge, a number of MPs called for cuts to be limited to 35 billion euros, cuts to central government funds to local government to be reduced from 11 to 5 billion euros in order to protect public investment, and to double to 10 billion euros a range of measures designed to raise purchasing power.

The MPs, including Pouria Amirshahi, Christian Paul and Jean-Marc Germain – both allies of veteran left-winger Martine Aubry – but also Hollande supporters, Philippe Nogues and Marie-Lou Marcel, further demanded one billion euros to fund 50,000 jobs, tax reforms that help cut inequality and poverty, “serious and specific” commitments from businesses in exchange for the planned huge tax cuts and the postponement of the EU deficit target of 3%.

Under the weight of austerity-fuelled domestic and Eurozone economic woes, France’s deficit amounted to 4.3 percent of gross domestic product in 2013. Under EU economic rules put in place after the sovereign debt crisis, socialist President Francois Hollande promised last year to trim the shortfall to 3.6 percent this year and 3 percent in 2015, the EU limit, thus failing to stand up to the EU’s defacto imperial power, Germany, as he had promised in his election campaign two years ago. 

Christian Paul said: “We were not elected to implement the loss of purchasing power.” Laurent Baumel, another socialist MP threatening not to back the proposals when they come to the vote on April 30, said the austerity plan did not reflect “the message we received at the polls.” With such anti-popular measures, the socialists were “going in the wall.” A prominent critic, Senator Marie Noëlle Lienemann, said: “The only new announcement are cuts at the expense of purchasing power of the lower and middle classes.”

Unions, who met with the government on Thursday, are also up in arms about Valls’ austerity plan. Force Ouvrière said it would “heavily penalize the most disadvantaged, and increase inequality, insecurity and poverty” and would “drag the French economy into deflation.” It added: “As we have stated several times, austerity is triply suicidal: socially, economically and democratically.” 

France’s economic problems are not just down to “fiscal” austerity – enshrined in successive EU treaties – but the monetary straight-jacket of sharing a currency with stronger economies, notably Germany, and dependence on the European Central Bank that sets interest rates for the entire Eurozone, comprising 18 member states. Earlier this week finance minister Michel Sapin expressed once again the Hollande’s concerns that the Euro was overvalued. This hurts French exports at a time when austerity policies are slashing demand at home.