By Mike Whitney
François Hollande hasn’t even been sworn into office and already he’s backpeddling on his campaign promises. Here’s the story from Reuters:
“France’s Socialist president-elect Francois Hollande may use a summer audit of state finances to water down his generous campaign promises rather than risk a backlash from financial markets against stubbornly high deficits and rising debt.
Advisers say he could even freeze some spending if the review turns up any nasty surprises, soothing investors who are worried he has become the figurehead for a fight against German-imposed austerity in the euro zone.” (“France’s Hollande may roll back spending promises”, Reuters)
Hollande, who narrowly defeated Nicolas Sarkozy in the general election, has promised to renegotiate the EU’s notorious “fiscal pact” and to push a “pro growth” agenda to offset the effects of austerity measures which have thrust much of the continent back into recession. He now appears to be reversing his position in an effort to placate the markets.
Reuters again: “We will discover the reality and strike a balance between fostering growth and making the necessary efforts to reduce the debt.” said Jean-Marc Ayrault, the Socialists’ parliamentary leader. (Reuters)
Wait a minute. How do you “foster growth”, which requires more public spending, while “reducing the debt”, which means increasing spending cuts? The two are mutually exclusive. And why is reducing the debt even on the agenda? Wasn’t Hollande’s entire campaign based on repudiating austerity?
Yes, it was, but now he’s following in Sarkozy’s footsteps and looking for ways to shrink government by intensifying cuts to social programs.
And what’s the first program on Hollande’s hit-list? Why Social Security, of course. There’s no better way to endear oneself to big finance than by taking the crusts out of old people’s mouths.
Reuters: “Advisors are pressing him to pare back spending in certain areas, particularly the deficit-ridden social security system….”
This is worse than anyone had imagined. Hollande has already figured out how to shrug off his campaign promises while launching a broadsides on vital social programs. It’s the double whammy! And there’s more, too. The new French president is “planning reforms to improve France’s flagging competitiveness”….which means that he’ll be hectoring the trade unions for concessions on wages and benefits.
The Reuters article casts doubt on the other progressive planks in Hollande’s platform, too, like his promise to force the banks to separate their investment and savings businesses, or his promise to tax millionaires at a higher rate (75%), or his promise to hire another 60,000 public employees during his first term. Is he really planning to follow through on these commitments or was it all just political grandstanding?
Hollande also promised to balance the budget in his first term. That’s going to make things a lot rougher on working people. When the government cuts costs during a recession, net-spending declines, unemployment soars, activity plunges, and consumers crawl back into their shells. This is how short-sighted policymakers turn a cyclical downturn into a full-blown Depression. Is that what Hollande wants?
Hollande’s “pro growth” agenda is also a bunch of baloney. While his allies in the European Commission may provide 10 or 15 billion for infrastructure projects in recession-stricken countries, there won’t be the kind of massive countercyclical fiscal stimulus that you’d need to ignite a strong recovery. Besides, the EZ’s managers oppose Keynesian pump-priming because it interferes with their main objective which is to shrink the size of government by cutting off the revenue bloodflow. (Starve the beast) So far, all signs indicate that Hollande will assist in this project.
But if Hollande is not really interested in the welfare of working people, then how did he nab the top-spot on the Socialist Party ticket?
That’s easy. It’s because the Socialist Party in France is a big sham just like the Democratic Party in the US. Neither party represents the interests of working people. Here’s a clip from an article in the Washington Post that helps to clarify this point:
“The men and women who are elbowing for senior posts in Francois Hollande’s new French government reflect a range of political trajectories. But one thing they share is Hollande’s view of socialism as free-market social democracy — a pragmatic ideology in which nationalizations, clenched fists and the hammer and sickle are things of the past.
As a result, analysts here say, the policies that Hollande will follow when he takes over as president on Tuesday are unlikely to disrupt Europe’s political and economic systems or upset France’s relations with the United States.” (“French cabinet hopefuls share Francois Hollande’s pragmatic view of socialism”, Washington Post)
How do you like that? No garish “hammer and sickle” for M. Hollande and his coterie of free market carpetbaggers. Oh no, just plain-old slash and burn neoliberalism wrapped up in a tidy socialist ribbon.
Can you see what’s going on here? Hollande’s not interested in change. Not really. He’s just another triangulating sock-puppet hauling water for big business. That doesn’t mean that he won’t try to persuade Germany to “lighten up” on the austerity-thing. He probably will. Not because it’ll give working people a lift, but because his fatcat bank buddies are worried about “skittish” bondholders. Those are the guys who really count, not the little people who run the machines and stock the shelves. Hollande knows that; he’s no fool. That’s why he’s never going to veer too far from the policies set by his predecessor, because any major change would piss off the plutocrats. And we can’t have that!