French Socialism in crisis: The undoing of Hollande's 'anti-austerity' programme.
| Author | McDaniel, Sean |
| Position | CRISIS POLITICS - Francois Hollande - Essay |
With the failure of President Hollande's anti-austerity programme and promise of 'le changement', ahead of this year's elections in France, the Parti Socialiste finds itself severely weakened and perhaps even at breaking point.
Winning power in May 2012, Francois Hollande presented a programme for 'le changement', promoting himself as an anti-austerity presidential candidate, determined to change the path of economic policy both in France and in Europe. Meeting the new President shortly after his election, Ed Miliband, then leader of the Labour Party, spoke of Hollande's victory as proof that the 'tide is turning' against austerity in Europe. These were optimistic times for the social democratic left; yet, less than five years later, the anti-austerity project is in disarray and almost everywhere in Europe social democracy is on the back foot.
The picture is bleak in France. For the French Socialists this is, perhaps, the rule rather than the exception; nevertheless, things as they stand seem particularly serious. With the Parti Socialiste (PS) divided, deeply unpopular and lacking clear ideological direction, the Socialist presidential candidate looks set to miss out on making it to the decisive second round of the upcoming elections. Not unlike other major European social democratic parties, the PS stands close to breaking point, ready to fracture between its leftist elements and its more centrist groupings. Despite contemporary divides in the party being less ideologically-driven and more personality-led than previously, the party's dominance of the French left is today in question, with voters being pulled in multiple directions away from the party. Traditional voting patterns look set to be upturned by competition from Marine Le Pen of the Front national (FN) on the far right and Emmanuel Macron in the liberal centre, whilst Jean-Luc Melenchon on the radical left could further erode PS support. There is a crisis of the PS's position in French politics, which resonates with a wider post-crisis crisis of social democratic identity.
It is argued here that it is possible to trace some of the difficulties of the Hollande presidency back to underlying and unresolved ambiguities in his economic programme, which have come to undermine it. The first of these relates to a fiscal balancing act; despite some strong anti-austerity rhetoric, Hollande pursued an ambitious fiscal consolidation programme, with the new government concerned to ensure French economic credibility was maintained with financial markets and France's European partners. The second element relates to acceptance of the European Union's (EU) new Fiscal Compact, despite public proposals to renegotiate it. German reluctance to renegotiate the Compact must be appreciated as a very real institutional constraint on the Hollande programme. Nonetheless, this article argues that due to underlying ambiguities in the Hollande programme, the Compact was legitimised and accepted quickly by the new government, which in turn has caused a number of difficulties for the government. Principally, leading to the third key ambiguity, the Compact pushed the Hollande administration to change the course of its economic programme and pursue a supply-side-oriented package of reforms, which has been very difficult to legitimise politically.
Whilst aspects of this programme are necessary responses to real problems with the French economic model, and do retain electoral support, Hollande's about-turn has revealed damaging programmatic and ideological ambiguities. Whatever the merits of this new programme, ultimately, it is argued, it has compromised the logic, distributional politics and normative content of the original Hollande programme and its anti-austerity politics. The Socialist administration has not been able to provide a cogent and coherent response to the crisis environment, contributing to a crisis of the Socialists' identity which will be played out in the upcoming elections and threatens their existence. The article starts by firstly setting out what is meant by the politics of austerity, before analysing Hollande's relationship to the politics of austerity, illustrating how it has changed since the early programme of 2012, and finally looking at the political impact of this for the PS.
Austerity in France and post-crisis Europe
Austerity and the French Socialist Party have a well-known history. Less than two years after coming to power in 1981 proposing a Keynesian reflation of the French economy and large-scale nationalisation, Socialist President Francois Mitterrand performed a humiliating 'U-turn' as a result of economic and institutional pressures to remain within the European Monetary System (EMS) and halt fears over capital flight. From 1983, Mitterrand's policy of 'competitive disinflation' involved importing German monetary and fiscal norms associated with a strong currency and competiveness achieved via a low inflationary environment. Ever since this chastening climb down, there has been a desire amongst the more centrist elements of the party, including figures such as Michel Rocard, for the PS to pursue a discours de verite--a more honest assessment of the politically possible when in opposition. Whilst Mitterrand's U-turn has been a stick to beat the left with since the 1980s, the Global Financial Crisis (GFC) seemingly represented a potential moment of real change for social democrats. Ostensibly, the crisis represented not only the collapse of the financialised liberal growth model, but also the neo-liberal ideology underpinning it, which had constrained the left since the late 1970s. Despite this, Hollande has been unable to break out of the impasse.
Of course, austerity is not an easily defined concept, and it has been experienced differently across Europe. Even including under Sarkozy's right-wing administration, austerity in France has been much less severe than in the UK since 2010. For instance, in his 2012 campaign Sarkozy pledged a total of [euro]75 billion worth of cuts up until 2016, over half of which would have been put in place before the election in 2012. (1) This contrasts with the cuts worth [pounds sterling]32 billion per year set out in George Osborne's 'emergency budget' in June 2010. Nevertheless, austerity has still had an important influence on French politics post-crisis, and so appreciating its role across different cases requires broadening our conception beyond the immediate role of cuts. Economistic accounts of austerity, which view it solely in relation to the level of fiscal adjustment, obscure the ways in which austerity is defined and used in both everyday and political discourse. (2) The reason for this is undoubtedly distributional: a tax hike on wealth is unlikely to be considered 'austerity' in the same way that cuts to public services are, even if both achieve the same fiscal adjustment. This renders it important to explore the politics of austerity, in order to better understand the term.
The existing academic literature has unearthed elements of the politics of austerity that can arguably be organised into two areas. The first demonstrates how austerity must be recognised as a political economic governing strategy which serves to consolidate the extant neo-liberal growth model in the post-crisis era through not only fiscal consolidation, but the reinforcement of the banking sector, the stripping back of the state, and a range of policy measures including liberalisation, privatisation and structural reforms to public services. (3) A second aspect of the literature views austerity as a particular system of thought or a set of moral claims. With roots in classical liberal economic assumptions (4), austerity has chimed with dominant neo-liberal conceptions of the political economy, which as Andrew Gamble notes, 'still supply the everyday "common sense" that dominates discourses...and provide the organizing assumptions that shape the formulation of policy'. (5) Foremost amongst these dominant conceptions of the economy is the idea that the state must manage its finances in much the same way as private households do.
From a perspective wherein austerity is seen as both a mode of political economic governance and a system of thought, we can view post-GFC austerity as a component in what has been described as a 'resilient neo-liberalism', which continues to shape the contemporary European political economy. (6) Rather than view the relationship between social democratic actors and austerity simply as one of inevitable...
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