Austerity rejected in Eurozone’s second biggest economy
Sarkozy’s downfall, alongside the crushing defeat of the pro-austerity parties in Greece, is a real turning point. Not only did he head the eighth European government to be defeated in the last year, the French and Greek elections were the most influential electoral rejection of austerity so far.
Following the massive struggle over pensions in 2010 many French workers, youth and other layers turned their attention to preventing Sarkozy’s re-election. But this election did not just see a personal vote against the arrogant, rude, “bling-bling” Sarkozy. It was also a rejection of the attacks he had presided over and a reaction to the mounting impact of the economic crisis on working people.
All the polls show that many did not vote for Hollande for his policies but mainly in order to oust Sarkozy. Nevertheless Hollande’s victory has created big hopes and expectations, not just in France but internationally, that the tide is beginning to turn against the assault on living standards. Hollande had to reflect the growing anti-austerity and anti-rich pressure from below, making some limited promises and presenting himself as an anti-austerity and pro-growth candidate. Hollande’s programme includes a number of pledges including increasing the minimum wage, creating 150,000 youth “jobs of the future”, hiring 60,000 new teachers and 5,000 additional police.
Supporters of Francois Hollande celebrate his victory at Place de la Bastille in Paris.
Hollande continued the pro-growth theme on election night. “Austerity can no longer be the only option,” he said in a victory speech on Sunday in his Tulle constituency. Later that night at the Place de la Bastille in Paris, Hollande told the crowd that, “You are much more than a people who want change. You are already a movement that is rising across all of Europe and maybe the world.” That is very true, but can Hollande deliver what millions are hoping for and demanding?
Will Hollande deliver?
Hollande’s narrow victory was the first Socialist Party (PS) presidential election success for 24 years and only the third (after 1981 and 1988) in the history of the Fifth Republic, established by de Gaulle in 1958. But despite the name of the party, this is not a victory for socialism in the sense of breaking with capitalism. Although in the campaign Hollande said his “true adversary” was the world of finance he does not stand for nationalisation of the banks, finance companies and major concerns. The PS is a party that seeks to work within capitalism. This does not mean that many PS supporters do not want change, reforms etc., rather that it is not a party committed to ending capitalism. The fact that, before his public disgrace, the millionaire former International Monetary Fund chief, Dominique Strauss-Kahn was the PS’s preferred candidate says a great deal about the party’s commitment to capitalism.
Alongside his promised improvements, Hollande also has a deficit reduction plan similar to Sarkozy’s. Both Hollande and Sarkozy’s economic plans are based upon a 1.7% growth next year. This is looking increasingly unrealistic; low growth or no growth will increase the markets’ pressure on Hollande.
The new French president is also proposing to introduce a constitutional requirement for the government to have a balanced budget and to eliminate the budget deficit by 2017, one year later than Sarkozy planned to. Hollande seeks to do this by saving 100bn euro a year through a mixture of tax increases and spending cuts, although he has not said what will be cut.
Outgoing French President Nicolas Sarkozy, left, with President-elect Francois Hollande, 8 May 2012
Potential of mass struggle
Nevertheless many capitalists fear that Hollande will be under enormous pressure from below to at least limit the austerity measures and the impact of the crisis. His victory will have strengthened the confidence of French workers, youth and other oppressed layers by showing that the right can be defeated.
This can lead to a re-awakening of the French tradition of mass movements starting from below that could force Hollande to go further than he initially planned.
Such struggles could start over both offensive demands, like higher wages, or battles against attacks, like redundancies. Already at the end of April, Hollande warned in Le Parisien that his victory would see a wave of redundancies: “Decisions have been taken that are being postponed. It will not be our arrival that will have triggered these redundancy plans”. In a radio interview Hollande said, “I won’t allow this cortège of redundancy plans to take place”. Workers facing the sack will try to hold Hollande to his word and demand he supports their struggle.
Hollande and his government will face enormous pressure from markets to resist any opposition to cuts and to demands for increased living standards. But at same time there are growing divisions amongst governments and capitalists in a number of countries over what to do. Even ratings agencies reflect this as they simultaneously demand cuts and complain that not enough is being done to stimulate the economic growth which is needed to pay back the debts.
Europe after "Merkozy"
Merkel and the German government are still standing tough, both on Hollande’s call for the fiscal treaty to be re-negotiated and on Greece, but could be forced to accept some measures that attempt to alleviate the crisis. Of all the leaders of major countries in office at the start of this crisis, only Merkel remains and it is far from certain that the present German government will survive beyond the next election due in September 2014. Thus the day after Hollande’s victory Merkel spoke of, “two sides of the same coin – progress is only achievable via solid finances plus growth”.
One German commentator wrote: that while “So far there are no realistic alternatives on the table to consolidating national budgets by making spending cuts. Hollande will have to recognise this fact within a few short weeks. France’s new leader will get a stimulus package as an addition and supplement to the already signed fiscal pact, but that will be all. This concession has already been established by Germany’s chancellor, the Luxembourg leader and euro-group president, Jean-Claude Juncker, and the President of the European Central Bank, Mario Draghi.”
The twin pressures of the on-going economic crisis and pressure from below will put Hollande to the test. While not challenging capitalism, Hollande can be pushed in conflicting directions, being forced to give concessions and to carry through attacks.
Support for the Left Front
After the experiences of the PS in office during the 1981-1995 Mitterrand presidency and the 1997-2002 Jospin government, many workers in France do not trust the PS; it is seen by this radical layer as a party that administers capitalism. The Jospin government actually carried through more privatisation than governments of the traditional right. This is the reason for the increasingly enthusiastic support in the first round of this election for Mélenchon, the Left Front (FdG) candidate, whose call to “take power” was seen as a rallying cry against the ruling class. This anti-capitalist mood was also shown by the over 600,000 who voted in the first round for the two parties, the NPA and LO, that are to the left of both the PS and FdG. Similarly there were large votes in 2002 and 2007 for the LO and LCR to the left of Jospin’s then ‘Gauche Plurielle’ (“Plural left”, the PS and Communist Party) allaince.
Now, in this stormy period, Hollande will be put to the test and because his government will base itself on capitalism, it is inevitable that, over a period of time, a process broadly similar to that under the Jospin government will unfold. But, as this is a time of economic and social crisis, it will be a far more stormy period than before. This will see a radicalisation to the left, creating the chance of building a new force committed to breaking with capitalism. But it will also see opportunities for the far right National Front to use a mixture of populism, racism and nationalism to build upon the support it has already amassed. A new, tumultuous stage has opened both in France and Europe.