By Jacques Sapir
President François Hollande celebrated on May 6 the third anniversary of his election to the highest office in France. This invites us to look at the record of the man and his policies. Much has already been said about it. The most obvious failure, but also the most predictable of his presidency has been unemployment. On this issue, Hollande has hemmed himself in to an untenable position: believing, against all evidence and the opinions of a great many people that the increase in unemployment has a cyclical dimension. He deduced that he had to wait for the upturn in the cycle for the situation to improve. By doing this, he condemned himself to Autosuggestion. His statements on this issue, and those of his ministers recall the words of the Russian Prime Minister in 1995 upon the worsening of the crisis. Victor Chernomyrdin was constantly asserting on television shows “Yes, the situation is difficult, but we see the light at the end of the tunnel …”. To which the Russians, who were not fooled, retorted: “Yes, but it is the locomotive that is heading our way …”
Hollande and unemployment
On the substance of the matter, Hollande has refused to acknowledge the structural dimension of unemployment in France, which is largely due to our membership of the euro zone. The deleterious effect of the latter comprises a direct and an indirect effect. The direct effect is clear. The strong Euro, which we saw until last fall, durably penalized the competitiveness of French companies. Falling corporate margins caused them to compress the wage bill, either by seeking all possible methods to lower wages, a point on which they found support in government policy, or by firing workers, and carrying out the same amount of work using a reduced number of employees. The best indicator of this perverse situation is the fact that today there are about 600 000 people suffering burnout while at the same time we have almost 4 million unemployed people without counting the severely underemployed. The decline of the euro against the dollar gave a little breathing space, but only for companies doing business in the dollar area. The problem of competitiveness will persist in the eurozone as France cannot depreciate its currency against Germany and the countries of Northern Europe. This is what explains that with the decline of the euro – which incidentally did not result in high inflation forecast in case of exit from the euro and return to the Franc by many economists – has had so little impact on the French economy.
To this direct effect is added the indirect effect of the Euro. The Single Currency brings with it a specific form of organization of financial and monetary structures. In particular, it prohibits the Central Bank (Bank of France) from offering loans to enterprises for their development, which renders ineffective the European Bank for Reconstruction and Development, not a bad idea accept that it could not rely on an adequate funding system. Traditional banks, largely refinanced by the European Central Bank, prefer to avoid risky lending, and provide minimal financing for economic activity. Strangled downstream by the direct effect of the Euro, French production is also hit upstream as it is unable to find the resources necessary for its development. French industry is waning, both by lack of demand, lack of competitiveness, and lack of funding. It is collapsing under the blows of foreign competition and non-economic pressures applied by the United States. Therefore the inexorable rise in unemployment should come as no surprise.
This merely reflects a deep blindness to the principles of economics, and one must wonder why Francois Hollande, who does not the profile of a Mitterrand, a Sarkozy or a Chirac, who is much better equipped intellectually to understand the nature of these problems, committed such errors. Not only did he not identify the root cause of the French crisis, but his”reforms” will only aggravate the situation. We know what the consequences will be, whether the it is the “Macron” Law or other measures that accompany it. By rolling back the welfare state incomes and therefore demand will reduce. Add to that an unthinking and largely unfair tax policies, and we can understand why demand is stagnating, but also the wrath of the middle and working classes, resulting in truly disastrous poll ratings for François Hollande.
The explanation for this blindness is simple, but the friendly, straighforwardness of his character has hidden it. There is, in fact, no blindness, but an ideological choice in favour of the European Union, and its more draconian rules. Not that François Hollande has not cherished the dream to change the EU. But faced with German intransigence, he preferred to follow other, more carnal dreams . Left with the choice of provoking a major crisis of the EU in order to change it, or to bow to the German will, Hollande has chosen to capitulate. And he made this key choice early in his term, as this was played out in summer 2012.
Much has been made of his propensity to choose easy solutions, to avoid conflict. This propensity certainly exists; one only to see how he handled his personal life. But here we would ignore an essential fact which is revealed every time when, having to make a fundamental choice, Hollande has demonstrated unquestionable hardness. Beneath his bonhomme exterior, displaying few declared convictions, always ready to compromise, Francois Hollande is an ideologue. Europe, or more precisely the European Union, is the fixed point of his ideology that he has never questioned, and to which he has sacrificed everything, his reputation, his career, his political future, his country.
I will not insult him by arguing that Hollande does not like France. But he only likes because it is in the European Union, because it is its destiny, according to him, to be inseparable from the EU. And if this requires imposing on France unending budgetary rigor, growing unemployment, rolling back the French political and social model, and introduycing rules that deprive citizens of their sovereignty, he does it without qualms. In pursuit of this vision, he is ready for all possible manipulation, lies and baseness. His family and some of his ministers (like Arnaud Montebourg) know this well.
What we also discovered in the last three years is the special relationship between Francois Hollande and his notion of “principles”. He likes to trumpet his unwavering
commitment to them. In this he is a product of the decay of the “socialist” party. But what one has seen in his exercise of power is mostly a very political exploitation of the concept of “principle”. The case of the two Mistral helicopter carriers is a prime example. As a result of the Ukrainian crisis, Hollande takes the decision to suspend delivery to Russia. But the President travels in person for the signature of “Rafale” combat aircraft contracts with Qatar and probably with the United Arab Emirates. So where is the red line? Certainly not on the issue of democracy.
All in all, and whatever the reservations and criticisms that can be made on this point of the Russian government, it is clear that Russia is more democratic than Qatar, the UAE and Saudi Arabia, which leads a war of aggression in Yemen without this unsettling French diplomatic circles in the least. On the issue of “principles”, a theme that Francois Hollande likes to use to don the clothes of the defender of freedom and human rights, one is forced to question his position. The question of the presence, or absence, of Francois Hollande at the May 9 victory day parade in Moscow, something that has nothing to do with disagreements we may have with Putin, but which is rich in the symbolism of these same principles, may confirm this.
Unless this cynicism hides something much more serious. One is uncompromising about the Russians integrating, consciously or not, among civilized peoples. Not so for the people of the UAE, Qatar and Saudi Arabia. These peoples are considered barbarians, so no one asks anything of them. The attitude of Francois Hollande, and more precisely its different attitudes with respect to Russia and these countries could therefore translate well latent Eurocentrism, at best, and at worst a form of racism, hidden under the mask of condescending smile.
The image of the President three years into his term is proving much darker than the picture the candidate wanted to sell us in 2012. “Mister Little Jokes” http://www.bbc.co.uk/news/world-europe-17675980, seems to have strayed into the dark side of farce.
Translation/edit by Revolting Europe