France: Economic stagnation and political instability

Hollande removes ‘lefts’ from government

The continued political and economic crisis that has beleaguered the Hollande government in France has seen a cabinet re-shuffle that could have far-reaching consequences in France and elsewhere in Europe.

There is discontent within the Socialist Party itself and amongst its allies who are beginning to take their distance from the government. The right, especially the far-right Front National of Le Pen, are pushing for fresh elections, not only of the parliament but also the president. They do not want what they are sure would be a new right-dominated parliament and government to have to ‘co-habit’ with a feeble Socialist Party president.

This week, three ‘left’ ministers (who in fact have not posed any real threat to the government up until now) were removed from the government – most notably, Arnaud Montebourg. Just to underline the true nature of Hollande’s government, he has been replaced as economy minister by Emmanuel Macron, a former Rothschild investment banker.

The change in the cabinet is unlikely to lead to the development of a split from the Socialist Party at this stage and the formation of some new left force outside it. For the moment, Montebourg seems more looking to replace Hollande as party leader and candidate for the next presidential election (in 2017). The Left Front is condemning the new governement but seems to be reacting slowly to the possibility of reviving its fortunes as a socialist opposition to the government.


The French government has been in a very unstable situation for six months now. Politically, it is very weak, especially after the poor results during the municipal and euro elections. The Socialist Party and directly the French president, Francois Hollande, are under a lot of pressure. Less than 20% of the population is giving support to the president and the government. Even Manuel Valls, prime minister since the 31st of March, has now lost 7 points in a recent survey, following the continual decline of Hollande since his election two years ago.

Hollande was elected as president more to get rid of Sarkozy than on the basis of his economic and social programme. But for a year he has been pursuing a clear policy of massive cuts and less taxes for the big business. This policy was rejected in the elections.

Economically, France is in a very bad position. Unemployment has reached a high level and has stayed at over 10%. Since Hollande was elected president in May 2012, there are 500,000 more unemployed people in the country with a total officially of 3,424, 000. And the government who was promising a new growth in economy, has failed to achieve it.

Hollande’s crisis accelerated

The poor performance of the European economy as a whole has speeded up the political crisis inside the French government on what to do now. The lack of growth and the continuing deflation have opened up a very difficult situation for governments and bosses. They will be forced even more to confront the working class and the youth in order to try and maintain their profits and their hold on power.

A number of bourgeois economists have begun to criticise austerity measures and cuts as a way of re-launching economies, but in France, the big bosses and French multinationals see these measures as vital both economically and ideologically. The previous president of the right, Sarkozy, however much noise he made, did not succeed in getting austerity packages adopted during his mandate.

Hollande and Valls have had to do the job. And they have announced a new set of ‘reforms’ – to facilitate redundancies and to introduce much more flexibility on the labour market, especially on the types of contracts. This policy was already in evidence at the beginning of the summer, concretised in a law called the Responsibility Pact.

Previously, Hollande presented himself as the man who would get a synthesis between a cuts plan, austerity and the relaunching of growth by giving a share to the population. The presence of the ‘left’ Montebourg and the neo-liberal Valls in the same government was a sign of this aim. In reality, this policy was just a posture to get elected and distinguish his policy from that of Sarkozy and his party, the UMP. By choosing to stick with Valls as prime minister, Hollande has clearly chosen to back the main big companies and support businesses like L’Oreal, Total and others to maintain their profits.

Montebourg, presenting himself now more or less as a neo-Keynesian, has already done a job for the big bosses in his ministry with the closure of Peugeot Aulnay and Good-Year Amiens, for example. One year ago, he was invited as the star guest at the MEDEF (French bosses’ association) Summer School.

Split inside the government and political crisis

The division between Valls and Montebourg has probably to be seen as much as an internal Socialist Party battle as a big economic disagreement. Hollande is very weakened after his 20 years of leading the PS before becoming president. Inside the PS and especially around some of its MPs, there are disagreements with the government. The PS is leading a lot of local and regional authorities and is much more an electoral machine than a party. A lot of those who have been elected know they will not be re-elected next time so they are expressing their disagreements more openly. Up until now this discontent has been expressed by an ‘abstention’ vote at the National Assembly on some issues like budget modifications, without risk to the parliamentary majority of the government.

The coming weeks will clarify on what level the crisis inside the PS is. At the same time, the UMP party of the right is in a deep crisis with the Sarkozy ‘come-back’ on the agenda.

Meanwhile, the French working class and youth see these debates as very remote; big layers of the population see them merely as politicians jockeying for position for their own gain.

Leaders on the left of the PS are all criticising Hollande now, and speaking about the next general election in 2017. But workers and youth cannot wait two and half a years to stop these vicious attacks. During this summer, local, isolated strikes have been taking place on the issue of working conditions and against closures and redundancies.

The leadership of the main union federations in the country, especially the CGT, grin and bear it. They are trying to avoid their major responsibility – that of defending workers’ interests. But the situation will undoubtedly get worse, and we will probably see important struggles taking place. The French elite and the capitalists are afraid of this.

The CGT leaders have set a date in October for a ‘Day of Action’ but it is not certain they will really campaign for it. The call for a real common day of strike action in all sectors against the government’s policy and the big companies is now vitally important.

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August 2014