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European Politics: France Changes Trains

Politics / Euro-Zone May 07, 2012 - 03:18 AM GMT

By: Andrew_McKillop

Politics

Best Financial Markets Analysis ArticleHollande's victory in France, like the major voter gains for the extreme-left Syriza party in Greek elections, and constant erosion of Merkel's two supporting parties in German elections, all held the same weekend, confirm the emerging and massive left - right split in European politics.


Anti-austerity politics is moving forward, as the so-called bourgeois liberal parties, politicians and powerful interest groups beat a retreat. This is already prompting rearguard action by their press, the business press. Hollande's victory, it says, was above all and only a punishment vote against Sarkozy, who despite his friendly-seeming nickname "Sarko" was despised by huge sections of the French public. For the lib-dems and bourgeois libs, the French elections were not a huge vote of anguish, nor a massive left - right polarization, but this quick re-write of history make a point of ignoring the massive gains for the ultra-extreme right FN party of Marine Le Pen. Her raging contempt for Sarko most surely did as much harm to his re-election chances as the extreme left, but the lib-bourgeois plays dumb on what that means. They dont like the future, so they say it doesn't exist.

No Future politics was in fact a basic Sarko hands-off way of governing for 5 long years, prompting another of his most extreme critics, left wing Jean-Luc Melenchon, to call him a playboy trotting out "purulent Thatcher politics of 30 years ago". Nothing forgotten, nothing learned !

Papering over the cracks will most surely be difficult, right across Europe, and soon. The business-friendly spin on France's elections holds firm to business-friendly themes like French competitiveness being "dented" by complex labor rules and high payroll taxes to support costly social programs, for example too many schools and hospitals. Who needs them ? It doesnt add that when major ex-nationalized corporate groups handed over to the private sector at literal give-away prices to their buyers, such as Air France, Areva and Renault experience financial and economic distress, they run to the French state for bailouts. Renault alone has scooped more than 1 billion euros in cheap loans and grants from the French state in the last 12 months - using plenty of this to build carmaking capacity in cheap labour Morocco where it will pay its workers $375 a month !

The business-friendly conventional right wing thesis is these ex-nationalized companies must trim their payrolls in their home country, and expand anywhere they can pay nothing to their workers, but of course never trim the sumptuous take home pay of their CEOs and board directors. Each round of redundancies, called "fat trimming" will get a cheer from financial players in the shape of a quick boost for the stock price. The ritual is well honed.

FROM NO CHANGE TO SEA CHANGE
Social responsbility fell through the New Economy safety net, but it surges back at the hustings. Probably sealing his fate with so-called liberals, Sarkozy made a few heavily mediatized attempts to stop or reverse a few factory closures and massive layoffs, in the last few months of his tenure, but his buffoon style and child-like incompetence had their usual drastic born loser impact. He had weakly demanded guarantees on maintaining employment, in return for bailouts and cheap loans from the state - prompting the lib-dems and their business-friendly press to ask how would the new Parti Socialiste president Hollande look so different, after all ?

The line of comfort reasoning, for lib-dems goes on to say that Hollande will quickly be whipped into  line by the markets, bond yields on Frennch debt will climb the wall of worry, making Hollande worry. Obama and Camerion, if not Merkel will punish him for engaging a pull-out of all French troops from Afghanistan before December 31: pretty soon Hollande, like any other usurper of power from its rightful bourgeois liberal owners, will retract and repent. The French future will be just slightly rose tinted. Things are fine.

To be sure, the lib-dems and bourgeois libs home in on Hollande's talk about re-editing and renewing Francois Mitterand's victory of 1981 - followed within 2 years by Mitterand telling his ministers, which included Communist party members, that henceforth they were going to kowtow to market diktat. No more extreme left grandstanding: they were told to let unemployment climb, hand out cash to the private sector's greediest players, like ace delocalizer Bernard Tapie, and play doggo as interest rates were racked ever upward to defend the French Franc, and company failures exploded. He gave the Left the fob of massive infrastructure spending on high speed trains and nuclear power - and even if they did not create jobs, they did bolster France's national prestige.

Does Europe want that movie again ? Maybe the business press, but it never moved the masses anywhere but to the soup kitchen and dole queue. For extreme right Marine Le Pen this bourgeois press was at least as much The Enemy as socialist media: for the extremes, total change is the sole solution.

OLD WAYS ARE BAD WAYS
French "socialism" of the 1980s mould stretched a full 14 years to 1995 under the same president Mitterand, who in his youth had been a civil servant in the Nazi collaborationist Vichy government "of course as a spy for the Resistance". Mitterand had also been an extreme right colonialist during the Algerian war, frequently ordering executions of Algerians as a minister in the 1950s, but was a long-term friend of the French Communist party - so serpentine and flexible he could swim in any political waters. Placing an exact handle on Mitterand's politics is very difficult, but Hollande's call for doing the Mitterand thing one more time had appeal to at least some voters. According to the media.

Above all, Mitterand's era was sufficiently far back to handily mythologize it as a Golden Age. At least in his times the Thatcher line of No Future had not yet crossed the Channel - which Mitterand and Thatcher tunneled under. France seemed great, looking far enough back in time.

No Future had not arrived in France. Not yet. In Sarko times, in the following century, it was wall-to-wall and everywhere. It was the only possible politics and it stank. Youth unemployment in many "socially difficult", that is immigrant majority suburbs often attains 50%. Unemployment only rises. France only loses its industries and the jobs with them. Its trade deficit only grows. Under Sarko, French sovereign debt grew by more than 700 billion euros. For French youth, which Hollande made a theme of dozens of campaign speeches, No Future is their daily reality, their everyday existence, but not their living. Delinquancy and drugs are the No Alternative, now moving to armed fight-outs with AK47 kalashnikovs, of course dragging in Islam and al Qaeda. Sarkozy did everything to make this endgame real, he did nothing. Totally out of synch with the real problems, Sarko's blustering and comic "new economy" prayer wheel shows at the hustings did nothing to stem the tide of his defeat.

WRONG WAY POLITICS IS OFF THE MENU
The focus of political change is now widening across Europe and battle lines are drawn: this will be a left - right struggle, with the extremes dominating. During the French elections although never directly in any speech by either candidate - but many times from their advisers and from dozens of analysts - the spectre of Arab Spring-type social and political conflict emerging and then, also like Arab Spring revolts hardening into civil war, was brought right out in the open.

Do the liberal bourgeois want that ? If so, they only have to keep going: the French elections of 6 May were also marked by major street protest marches by aggrieved police protesting the Sarkozy trick of halving the number of police and allied security forces in the ever-tougher immigrant-majority workless No Future suburbs. They now face immigrant-origin fighters armed with AK47s. Also unusual, the leader of one of France's two remaining powerful trade unions openly called on union members to vote against Sarkozy. Breaking ranks with the tradition of not taking sides, Bernard Thibault said that times are too tough to let Sarko go on doing harm, by doing nothing. To be sure, much more predictable, the director of the employers' federation called for a Sarkozy yes vote, and the spin doctors of every TV channel owned by big business worked hard and long for Sarko.

But neither the extreme left nor the extreme right in France called on their supporters to vote down Sarkozy. They had slayed him, day after day at the hustings, but Sarkozy-Hollande are close to one and the same thing, many of them said it outright. Having confidence in the Parti Socialiste of Hollande is as plain stupid as believing in Sarko's UMP party - which is likely to collapse and break apart. No policies, no plans, no programme. Tax and spend for the socialists, spend and spend for the lib-dems.

What happens next will be in accelerated mode. Sarkozy was almost certainly the last of the line of what could be called liberal-bourgeois politicians in Europe, and already a mutant. Gargling one-liners from the Thatcher and Reagan era, in France of 2012, was already archaic and laughable but above all a disaster for the economy and society. In their day, the Mitterand era of 31 years back in time, leaders could step the wrong way and get away with it, for years. There was surplus wealth still slopping round the system, there was still fat to trim and burn. The open air festival of disaster economics could run for years, and years - to the delight of profiteers and hucksters.

Hollande will quickly find out he doesnt have a 2-year playact socialist grace period like Mitterand, but also doesnt have the bourgeois liberal easy way out of just letting things drift, and rot through doing nothing. The end of the tunnel is behind us, a long way back, we are now in a New World. Hollande's senior advisers, including Arnaud Montebourg talk that way and they know that doing nothing is off the menu. Action will have to be quick and will have to be extreme.

As in France, this is the new No Alternative in Europe. Old playact politics has zero life expectancy, for example the nationalization-privatization playact, shuffling ever shrinking stocks of wealth between ever more uncertain and unsure hands. Breaking out of de-industrialization, the scourge of liberal politics will need a lot more than high speed trains or windfarms (or windfarms-plus-nuclear reactors). Creating millions of new jobs very fast, or fanning the fires of civil war, is the new and tough choice on the table, and there is only one choice. Taming the banks, brokers and traders is urgent and necessary, before they can anarchically destroy all and anything that is tried to solve the future.

Hollande's victory is a sure step to new and different politics in Europe: both content and style will change, and if they dont the slope to the abyss will go vertical. Hollande knows this, and French voters knew it when they went to the polls.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2012 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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