Seen from a European capital other than Paris, the economic policy adopted by the successive governments of François Hollande is not surprising. This lack of surprise is not explained by a better knowledge than the French electorate of the doctrinal orientations of the former First Secretary of the Socialist party. It is entirely due to the distance with regards to political passions that a relative geographical remoteness allows.
The options of responsibility and solidarity pacts display two fundamental characteristics.
One is their inclusion in the continuation of the European strategy inaugurated by François Mitterrand in 1983. This strategy links the contents of the Community’s construction process to the interests of the German economic and geopolitical giant whilst subjecting said contents to a widely intergovernmental collective decision-making process.
The other characteristic is to reproduce the principal features of the national policies adopted by Social Democrat parties in Europe, namely the search for a reduction in public deficits in line with Maastricht commitments, job creation in return for a reduction in the social and fiscal charges imposed on businesses and a modernisation of the social security structure founded in 1945.
This analytical framework dismisses the hypothesis of a French social-liberal exception resulting from the 2012 presidential election or the recent cabinet reshuffle. The economic policy of François Hollande and Manuel Valls lies within the Social Democrat mainstream personified by the German SPD, the Belgian Socialist parties or the British Labour Party, among others.
This framework also shows how the difficulties encountered by the French government are common to the ʺleft wing of governmentʺ and are structural. Schematically, they can be reduced down to two.
The first comes from the erosion of the tradition fiscal foundation of public policy financing, which is the result of the reduction in the share of labour income in European wealth. Both industrial policies and social policies necessary for the wellbeing of the populations are exposed to the consequences of a reduction in public resources. In theory, a solution lies in taxation on capital and borrowing. In practice, one is unfavourable to investment whilst the other signifies an increase in the dependency of the States in relation to the markets as well as a breach of EU rules.
The second structural difficulty is as macroeconomic as it is sociological, since it concerns the allocation of resources. The challenge faced by the governing left at the start of the 21st century is not just to safeguard the financing of the traditional welfare states; it must also reconsider the contents of the social pact of the ʺtrente glorieusesʺ [the thirty-year post-war boom] taking into account the evolution of requirements. In other words, social democracy must incorporate within the budget period – which is already subjected to international constraints – the demands of a society that is no longer one of full employment and low life expectancy for those who cease their professional activity in their sixties. In very concrete terms, the drawing up of the budget has become a moment of delicate arbitration between the financing of pension schemes, unemployment insurance and job creation. Unlike the neo-liberal parties, socialist parties cannot succumb to the easy option of sacrificing one of these objectives in the search to restore economic growth.
Ultimately, the distinction between the French left and its European counterparts is perhaps the electoral price paid for the reforms they have announced or begun and for slow or partial results.
An analysis of the track record thus far of François Hollande’s governments allows for two explanations.
One is that, unlike Mr Renzi, François Hollande may have made the mistake of not openly stating his divergences with the dominant economic orientation at the heart of the EU. He lost out by not having endorsed, upon taking office and further still prior to the 2014 elections – in the form of a major speech on foreign policy inspired by the lyricism of Dominique de Villepin at the UN – the remarks made by Michel Sapin in August in an opinion column of Le Monde regarding the necessity for a reorientation of European policies.
The other is that, in March and then in May 2014, French voters sanctioned the inadequacy of the social reforms introduced in return for austerity measures. This hypothesis also applies to Laurent Bouvet, who showed how courageous ʺsocietalʺ reforms such as the elimination of discrimination in marriage law could not, in times of economic crisis, suffice in order to meet the expectations of ʺsocialʺ, i.e. socio-economic, reforms.
The intention of Laurent Bouvet continues in the acknowledged reticence of French socialists to make the reduction in contributions granted to businesses dependent upon results-based commitments or upon a reform of ʺcorporate governanceʺ designed to promote the representation of workers and consumers.
This last observation finalises the rapprochement between the economic policy of the French left and that of the other Social Democrat parties of Europe. The poor results of ʺsupply socialismʺ, confident in the goodwill and capacity of businesses to reduce mass unemployment, have not yet led to an evolution towards the adoption of ʺproduction socialismʺ, subjecting the way in which businesses choose to use the resources provided to them by the States to social dialogue.
Université Libre de Bruxelles, member of the Scientific Council of the Foundation for European Progressive Studies (FEPS)
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