Another government reshuffle in France

French social democracy finds itself between a rock and a hard place.

The French government collapsed on 25 August, rent asunder by divisions over France’s continuing and deepening austerity programme. In the face of open criticism of the government’s austerity policies by economy minister Arnaud Montebourg, who accompanied his remarks with an attack on Germany for ‘ruining the region’s economy’ with what he called an “obsession” with economic austerity, Hollande ordered prime minister Manuel Valls to dissolve his cabinet and appoint a new one.

The austerity programme, quite apart from being contrary to what ‘socialist’ president François Hollande promised when he stood in the presidential elections, is driving millions of French voters away from social democracy – mainly into the arms of the right-wing Front National, the French equivalent of UKIP, headed by Marine Le Pen.

Capitalising on the islamophobia that the bourgeoisie of the world is spreading in order to sow divisions in the working class, the FN has been ditching its traditional anti-semitism and has even secured some support among French jews. A poll held recently showed that if Hollande and Le Pen were to contest presidential elections now, Le Pen would win.

The French austerity programme has so far singularly failed to achieve any positive results, contrary to what was promised when it was introduced. The country’s economy is effectively at a standstill, expected to expand at a mere 0.4 percent in 2014 (well below the 1.7 percent rate the government forecast earlier this year), while the public deficit will remain at around 4.4 percent of gross domestic product (up from 4.2 percent last year, and well above the government’s 3.8 percent target).

Unemployment stubbornly remains at over 10 percent. Taxes have risen, and the French are now having to pay to use services that were formerly free.

Nevertheless, Hollande and Valls are standing firm on austerity, and the French cabinet has now been cleansed of its three ‘leftists’, who have been replaced with less faint-hearted servitors of imperialism prepared to carry on implementing cuts for as long as it is required of them to do so. Montebourg’s place as economy minister has been given to a former Rothschild commercial banker, 36-year-old Emmanuel Macron.

The ‘socialists’, such as Montebourg argue that the economy would surely recover if austerity were to be relaxed so that people could have more spending money, thus putting more demand into the economy. This argument is dismissed by Macron as ‘outdated’. Instead, the French are being offered business-friendly ‘supply-side socialists’, who argue that reduced taxes on business (which necessitate public-spending cuts) will boost profitability so as to increase production for the globalised marketplace, thus creating jobs.

As is explained elsewhere in this issue, however, neither approach is likely to offer any remedy for what is simply a crisis of overproduction. Cutting public spending and lowering wages exacerbates the lack of demand in the economy – obviously – while relying on borrowing to maintain public spending leads to the government having to pay higher interest rates, reducing its disposable income and risking sovereign default. Capitalism simply doesn’t have a solution except to force down the pay and conditions of the workers at home, wage war for profits abroad, and try to ride out the storm.

However, the bourgeois economists who advise governments encourage them to hope beyond hope that the lower production costs facilitated by austerity will enable them to win the battle for exports and pull their country out of crisis – never mind that this would have to be at the expense of their foreign rivals, who are all, incidentally, trying to pull off the same trick.

The saga may well not have ended with the appointment of the new cabinet. In December, the French parliament votes on the 2015 budget, and the Montebourg ‘left’ may well be able to muster enough support to ensure that it does not pass. But with Hollande’s popularity ratings now as low as 17 percent, any election forced by the fall of the government is unlikely to result in many votes for these ‘socialists’, and, that being the case, Montebourg and his supporters may well fall into line.