Saturday, December 29, 2012

Delors Invites Brits to Leave the EU

"Europe--love it or leave it" is the advice of Jacques Delors, one of Europe's Founding Fathers, to the UK. Delors, who seems always to have known that the euro project was doomed without tighter European integration, has come to see the UK as the primary obstacle to such integration and therefore to the survival of his life's work. But it's a dangerous strategy to suggest that any member state, let alone one as important as the UK, choose a strategy of exit as opposed to voice or loyalty (to invoke the memory of the late Albert Hirschman). Delors's spleen is showing, but so is his age. The younger Delors would have put up a fight, I think, rather than thrown in the towel, no matter how exasperating Albion's latest provocations.

Constitutional Court Quashes 75% Income Tax

The Constitutional Court has ruled that the 75% top marginal income tax rate, sprung by Hollande as a surprise on his own campaign earlier this year, is unconstitutional because it affects different households unequally depending on how total household income is distributed between spouses.

So how does one assess the fate of Hollande's most distinctive campaign ploy? It may well have helped to elect him by portraying him as a candidate farther to the left and more intransigently opposed to malefactors of great wealth than he actually is: "Riches, je vous haïs," he came across as saying, in a paraphrase of André Gide, but in fact the measure never made much economic sense and could be defended largely on the grounds that it would affect so few people and raise so little revenue as to be pragmatically insignificant. But as Hollande's post-election approval rating sank, the top marginal tax rate became a symbol not of Hollande's left-wing bona fides but rather of the inchorenece of his economic strategy. The Conseil Constituionnel was no doubt eager to strike it down at the first opportunity.And the government will no doubt seize on the opportunity to throw down some new symbolic markers demonstrating its determination. But what is really needed is a comprehensive overhaul of the tax system, which it is now too late to attempt, Hollande having expended his meager political capital already. So he must muddle through with the tax policy he has and hope that things improve without significant government input, for which the wherewithal is lacking.

Friday, December 28, 2012

Social Catholicism

Causeur has inaugurated a series on the history of social Catholicism in France. This movement exerted an important influence of French social policy, especially in the post--WWII period, when Christian Democratic influence was high. The background provided here by Jean-Louis Schlegel, who, with Denis Pelletier, has just published À la gauche du Christ. Les chrétiens de gauche en France de 1945 à nos jours, Seuil, 2012, is worth reading.

Casanova Targeted at Sciences Po

The struggle over the leadership of Sciences Po continues. Three prominent intellectuals--Claire Andrieu, Olivier Borraz, and Karoline Postel-Vinay--have published a manifesto in Le Monde calling for the ouster of Jean-Claude Casanova as head of the foundation that oversees the management of the institution. (Full disclosure: I know Andrieu, Borraz, and Casanova personally.) Readers can evaluate for themselves the reasoning with which they back up their call for Casanova's ouster. Casanova's admission that he was not aware of certain irregularities in the management of Sciences Po during a lengthy period in which it seems to an outside observer that he should have known more suggests that, in the interest of greater transparency, it might be a good time to install a new board of directors.

On the other hand, a group of distinguished outside observers insists, in yet another Le Monde op-ed, that many reforms of the "Descoings era," which coincides with the period of "irregularities" in the management of Sciences Po, are worth preserving. The question is how to preserve the achievements (and to identify those worth preserving) without also preserving the "irregularities," some of which seem to have been necessary to making the reforms work. Clearly, this is not a matter that can be settled by op-eds directed to a general public that has no knowledge of the inside workings of Sciences Po. An infusion of new blood does seem essential, but the choice of which new blood to infuse will also weigh heavily on the ultimate outcome of the "reform of the reforms."

What is needed is strong but impartial leadership from both the state and the intellectual community, both of which are deeply compromised by past partialities in regard to the Descoings era. Is there a way to slice through this Gordian knot? In the US, in situations like this, academic departments are sometimes placed "in receivership" by their tutelary institutiions. A period of "extraordinary measures" seems inevitable for Sciences Po, but it is hard to be sanguine about the outcome, siince any number of the players are consummate insiders who know well how seemingly impartial processes can be rigged to achieve desired results. I think it is safe to say, however, that a new Sciences Po will eventually emerge. Exactly what its character will be is difficult to say at this point. Yet this is an issue of great public importance, since Sciences Po, as much as any other single institution, selects the French elite and therefore weighs inordinately on the kind of thinking that is considered legitimate in contemplating new public policies. Ideas matter in politics, and Sciences Po plays a disproportionate role in determining what ideas matter and what kinds of state action are legitimate.

It should be noted, moreover, that generational change seems to be an important factor in this struggle. Although Descoings himself was fairly young at the time of his death, his backing at the FNSP came largely from an older generation. Casanova, for instance, is 78. Retirement rules concerning French professors are fairly strict, but no such rules apply to the governing board of a private foundation like the FNSP. The younger generation may feel stifled by the kind of recruitment favored by the old regime at Sciences Po, and this feeling of institutional blockage may contribute to the evident bitterness of the debate.

Thursday, December 27, 2012

Hollande Se Lève Tôt

François Hollande, like his predecessor before him, paid a visit to Rungis. This afforded François Miclo an opportunity to use Hollande's own words to critique his performance as president:
Seulement, cette forme de communication un peu vaine a quelque chose d’outrancier… Ce n’est pas moi qui parle, mais François Hollande lui-même. En mai 2008, il commentait ainsi la visite matinale qu’avait effectuée Nicolas Sarkozy à Rungis : « Il faut éviter ce type de communication qui peut paraître outrancière. Se préoccuper des Français, ce n’est pas se lever nécessairement tôt le matin, c’est être capable de répondre à leurs questions… Nicolas Sarkozy est en campagne comme si d’ailleurs il était candidat : il reprend les slogans de sa campagne, il reprend les formules de sa campagne, les rites de sa campagne, les artifices mêmes de sa campagne. »
Bien vu.

Wednesday, December 26, 2012

Slaughter on EU-US Relations

According to Anne-Marie Slaughter, former head of State Dept. policy planning, 2013 will the the year of a US-EU free trade agreement. Hilary Clinton, Slaughter believes, has finally recognized the strategic importance of Europe as an asset in US competition with Asia: "America is not pivoting from Europe to Asia; we are pivoting with Europe to Asia." If this analysis is correct, then Slaughter deduces that the cost of British exit from the EU will go way up, so this coming year should be a very interesting one for British Euroskeptics.

Monday, December 24, 2012

Private Funding for French Cultural Icons

Facing tough austerity measures, French cultural institutions have resorted to good old-fashioned Yankee entreneurship: they have turned to private mécènes to make up the shortfall.

Sunday, December 23, 2012

The Depardieu Affair

Frédéric Martel, the host of  Soft Power on France Culture, has this to say about the Depardieu affair (via Facebook):
Contrairement à ce que l'on pense - à Paris, dans la gauche bobo, dans les beaux quartiers etc. - l'affaire Depardieu est un désastre pour le gouvernement. Elle a donné un visage à ce qui est en fin de compte une injustice : sur le marché de mon village ici, dans le Sud, tout le monde lui donne raison depuis qu'on sait qu'il a certainement été imposé à plus de 70 % (peut-être 80 % comme l'a montré Le Monde à cause de l'ISF non plafonné). Les Français, en fait, pardonnent beaucoup à leurs stars et à leurs artistes. L'opinion publique est en train de basculer en sa faveur. Des politiciens, des Moscovici, des Cahuzac, des énarques inspecteurs des finances, on en a beaucoup ; mais des Depardieu on n'en a qu'un. Et dans le match Hollande-Depardieu, c'est Depardieu qui rafle la mise. L'affaire Depardieu va, contre toute attente, coûter cher à la gauche. Elle est un révélateur.

Thursday, December 20, 2012

Langue de Bois

François Kalfon is one of the PS militants who signed a letter to François Hollande urging him to change course on economic policy before it is too late. You might think that such a stand would place him rhetorically closer to Mélenchon than to, say, Manuel Valls. But no, M. Kalfon, who is a part of a group within the PS charged with monitoring public opinion, is a born apparatchik whose mother tongue is langue de bois. I haven't seen the likes of this since the days of Georges Marchais.

A few choice examples:
J'ai reçu de nombreux mails et courriers d'électeurs de gauche qui me disent leur soutien et leur satisfaction de notre démarche. Car ils se sentent ainsi légitimes et entendus. En ce qui concerne le gouvernement, le président ou le parti, je sais qu'ils nous entendent, je sais qu'ils font leur maximum. ...

Je m'inscris en faux sur cette lecture libérale de notre politique. Beaucoup de choses ont été faites. Je pense au blocage des loyers dans les grandes villes : cela a un effet immédiat sur le pouvoir d'achat. ...

Mais contrairement au passé, où certains de ses prédécesseurs ont dit : "Face au chômage, on a tout essayé", je vois un gouvernement qui a entamé le redressement productif, même si, bien sûr, jour après jour, il faut l'appuyer dans ses combats et ses décisions. [En passant, note that there are some in the PS who compulsively revisit the trauma of 2002, as if picking at a scab, and for whom the answer is always la faute à Jospin.] ...

A nous d'identifier les filières d'excellence européennes : les énergies vertes, l'économie créative, les grandes infrastructures de transport, qui ne sont pas soumises à la concurrence des pays à bas coûts. A nous aussi de sortir de la naïveté de la Commission européenne, qui, au lieu de construire des champions européens, a préféré traquer de façon maladive les "ententes" et fluidifier de façon névrotique les mécanismes de marché là où nos concurrents asiatiques et américains consolidaient leurs champions et protégeaient leurs marchés.

Italian Politics

Brent Whelan continues his musings on Italian politics here.

Wednesday, December 19, 2012

Cahuzac? What, he's still around?

I have a new measure of the political importance of a scandal. Does it outlast a short stay in hospital? Apparently, the Cahuzac affair meets the test. I was out of touch with the French news for a few days while dealing with the sequelae of a FUO (fever of unknown origin). You see how quickly I pick up the medical lingo. And I return home to find Cahuzac still in the hot seat. One thing is certain: Edwy Plenel and his friends will press any advantage against either la gauche caviar ou la droite bling-bling.  I wouldn't be surprised if some of these grudges go back a long way, to radical fringe battles of the past forgotten by all but the participants.

As for the Cahuzac business, I have no idea what's true and what's not true, so I will let the principals shout themselves hoarse. I have no voice anyway. Perhaps tomorrow morning French politics will once again look significant enough in world-historical terms to spend my time on. At the moment, I'm not so sure.

Sunday, December 16, 2012

Nine Months to Conceive and Deliver a UMP Leader

With the ship sinking and neither captain eager to leave, there was apparently no choice but to plug the leaks, try to steer a course away from the rocks, and hope for the best. So Fillon and Copé have apparently agreed to new elections in September 2013. This long gestational period of 9+ months is presumably intended to allow time for a realignment of forces within the party. Of course, such a realignment risks eliminating both of the current contenders. Perhaps Bruno Lemaire or NKM wil have his or her chance after all. But who knows what other ambitious men and women may even now be revising their calculations?

Does any of this matter to anyone outside the UMP ambit? Only if the party primary determines subsequent party strategy toward the FN, and there are other factors at work in this dimension. Copé is widely seen as having adopted the Patrick Buisson position of shifting the UMP ever closer to the FN. This is correct as far as it goes, but Copé, like Sarkozy, was an opportunistic Buissonien rather than a convinced one, and now that the maneuver has failed, he may well be tempted to try a new tack.

Similarly, Fillon, the "moderate," really isn't so moderate on economic issues, and Copé may well decide to mount an economic populist campaign of the sort that worked so well for Marine Le Pen but may be a rather difficult hat trick to pull off on the part of a corporate lawyer. Fillon will now have to develop some themes other than "moderation" and "anti-Copéism." So the debate could get more interesting. Or it could degenerate into a complex set of local maneuvers, with most of the horse trading taking place where no one can see it.

In any case, September of 2013 brings us to the German federal elections as well, to so one thing is certain: the European context will have changed considerably.

Tuesday, December 11, 2012

Albert Hirschman Dies

Albert Hirschman died yesterday at the age of 97. He was one of the most original thinkers of our time, as great a prose stylist as he was an economist, as important an anthropologist and sociologist as he was a theorist of development. France played an important part in his personal history. He spent the war there working for Varian Fry, an American who ran a network in the unoccupied zone that attempted to rescue persecuted, fleeing intellectuals and artists. I was privileged to know him through his two daughters, Lisa, who predeceased him some years ago, and Katia, who still lives in France today. His son-in-law Peter is my closest friend, and I burped his grandchild, Alex, on my shoulder eons ago. His death is a great loss not only for academia but also for the many friends he made in the course of his ceaseless travels, nearly always in the company of his vivacious, cultivated, and acerbically witty wife Sarah, who died earlier this year. Rest in peace.

(Princeton University Press will publish a biography by Jeremy Adelman early next year.)

Monday, December 10, 2012

Fillon, Copé Destroy Each Other

Copé is now approved by just 17% of respondents to an OpinionWay poll, well behind Marine Le Pen (31% approval). Fillon does slightly better, at 33%. Of course, such polls demonstrate nothing so much as the fickleness of the electorate, but at this point the two UMP "leaders" must be asking if the game is worth the candle.

Saturday, December 8, 2012

Bouvet's "Hollandisme"

Laurent Bouvet offers a careful, deliberate, analytical reading of what he calls "le Hollandisme" in power, which he sees as in many ways continous with Hollande's tenure as head of the Socialist Party:
Cette pratique du pouvoir, qui était déjà visible et sensible chez le premier secrétaire du Parti socialiste pendant dix ans, met en lumière un deuxième trait caractéristique du hollandisme : le refus de tout a priori idéologique, de toute position doctrinale figée.
For Bouvet, Hollandism, in addition to rejection of rigid a priori ideological doctrine, consists of what Dick Morris first named "triangulation" (LB: "son sens de l'équilibre et sa permanente quête d'un compromis entre des positions adverses, sinon antagonistes"), coupled with a "new sociology of power" characterized by a return of the énarques, banished (to a certain extent) by Sarkozy, and promotion of local leaders who had worked their way up through the ranks of power in socialist-controlled local and regional fiefdoms.

This is an intelligent analysis, and as Bouvet notes, it is too early to say whether Hollandism will actually bear the desired fruits. Using Bouvet's categories, however, one can hazard a few judgments. The "new" sociology of power is perhaps better seen as a return to the old sociology of power of the early years of the Gaullist Republic, Then, le pouvoir périphérique, as Pierre Grémion called it, governed effectively by striking a compromise between a highly technocratic and competent central state and flexibile, opportunistic local power elites. The challenges now are different from the challenges then, however, and one might argue that such a coalition was better suited to the needs of postwar reconstruction and modernization than to the Schumpeterian creative destruction required (to my mind--many will disagree) by the present conjuncture of the global economy.

Second, pragmatism can be a desirable quality in a president, but it must be tempered by a firm fix on the North Star: in plain language, the leader must know where he wants to go. Bouvet sums up Hollande's presumptive goal in a resonant formula:
de devenir en cours de mandat un grand président de gauche qui, grâce à l'efficacité de son action davantage qu'à son sens du tragique dans l'Histoire, changerait enfin la société française en réorientant ses choix économiques, en pesant sur le destin européen et en garantissant davantage d'égalité entre ses concitoyens.
Achieving these ends would indeed change the French perception of social democracy for the better, and Hollande wants to be remembered as "a great social democrat" as well as "a great president," but it would be reassuring if his intermediate goals along the way to such a fine destiny were more clearly articulated. It is hard to judge the efficacy of any particular policy or strategy against such a general aim as "reorienting France's economic choices and weighing on Europe's destiny."

Finally, flexibility and suppleness are fine things, but in the end, gouverner, c'est choisir, and firm choices have never been Hollande's forte. As Socialist leader he temporized; as President he has frequently, and quite properly, availed himself of the prerogative to remain above the fray. But there will come a time--there have already come times--when he must make his position known, and then we will see whether, as Texans say, he's all hat and no cattle or the real deal.

Cohn-Bendit Quits EELV

What had been a separation is now officially a divorce: DCB wants no more to do with EELV. In some ways, this is an odd dénouement to a long saga, since Cohn-Bendit had long argued that EELV should not run a presidential candidate of its own but instead try to exert maximum leverage on the Socialists. Others countered that without a candidate of its own, the party had no leverage: that was precisely the issue.

Now, both sides have their wish: the EELV leadership has become a (minor) appendage of the PS, bound by the doctrine of governmental solidarity to stifle the opinions of its own ministers when they differ with those of the government, and linked to policy choices unpopular with EELV voters. So EELV is both decapitated, as DCB wished, and impotent, which he claimed would not be the consequence of decapitation. His departure is therefore the logical culmination of his and his former party's contradictions.

But Dany's position in the French political spectrum was unique. He could not be intimidated by left-wing romanticism of the sort that Mélenchon successfully peddled for a while. He had grown up in the struggle against outmoded ideas of the universal working class, the vanguard party, and the "relative autonomy" of politics and economics. Yet he was anything but an armchair theorist of a new left. He thought of politics as a profession, requiring commitment and hard work, and not as a psychoanalytic transference leading to personal catharsis, a posture he often criticized in his comrades at EELV. The demands of that high and selfless ideal of politics were no doubt too great to attract people in the numbers required to form a political party, especially in the absence of tangible reward. So other Greens have become ministers, while Dany the Red once again retires from politics, possibly for the last time. Go in peace.

Thursday, December 6, 2012

Apologies for My Absence

Dear Readers,
I apologize for my absence of several days from the Web. I had an allergic reaction to a new drug and had to suspend my normal activities. I'm back now and will maintain regular blogging if I can, but there may be additional lapses in the days to come. Just know that if I could be with you, I would.

Saturday, December 1, 2012

Merkel Hogtied

Although Chancellor Merkel currently reigns as the Iron Lady of Europe, her actions are constrained by German domestic politics. There is an election coming up next year, and there are signs that the "chancellor's majority" is no longer holding:
The focus instead was on the 23 lawmakers from Chancellor Angela Merkel’s own center-right coalition who voted against the measure, robbing her, for the third consecutive vote on Greece, of the so-called chancellor’s majority, or absolute majority among her government’s own deputies.
While not relevant for Friday’s vote, the chancellor’s majority is widely seen as an indicator of the strength of the incumbent’s power base, because most legislation put before the lower house of Parliament requires only a simple majority of those voting. Missing it on three votes in a row on one policy matter, in this case, Greece, is unusual.
“The missed chancellor’s majority is a clear sign that even if one wants to be a good colleague, even her party colleagues do not agree with her government’s policy of pushing these packages through Parliament,” said Manuel Becker, a political scientist at the University of Bonn.

Steel Yourself

What exactly has the government now agreed with Mittal? What was agreed in the past? Who knows? Everyone involved in this tangled affair is trying to save face. There is a good deal of bluster in the air, as there always is when Arnaud Montebourg is involved, and precious little analysis.

What analysis there is is not very enlightening or even coherent, such as this piece in Mediapart. The writer simply assumes that mentioning the involvement of Goldman Sachs in the financing of the Mittal empire is ipso facto discrediting. But no one ever accused Goldman of stupidity. If Goldman backed Mittal's acquisitions, it was because it bought his strategic analysis of the European steel market. We don't really know what his strategy was or his motive in acquiring obsolete, underproductive plants such as Florange and Gandrange. Perhaps there were other parts of the Arcelor empire that were key elements of an undisclosed plan. Florange and Gandrange would ultimately have been converted to new uses. In any case, the old plan is now moot, because the European recession has sharply reduced steel consumption.

But Montebourg has forced the state to act, and so the state has stepped in as party to a deal that may be a very bad one for taxpayers if it involves large state investments in perpetuating obsolete technology rather than shifting work at the two threatened sites to new ones. This is precisely what the state should not be doing. Of course it may not be doing that. We don't really know. All we have are reports like this one that Mittal workers are "disappointed" with the "compromise." To hear some of the demonstrators describe the case, it would be more accurate to say that they are disappointed that the status quo, unsatisfactory as it is, won't be maintained. Better the devil you know than the devil you don't. Such nervous reluctance to change is perfectly comprehensible in a situation where trust among the parties has broken down completely, but it can also become an obstacle to the kinds of changes that are needed to put French heavy industry on a sounder footing.

When the sound and fury die down, we may learn something. For now, we can just sit and watch the spectacle play out in the time-honored manner of high-stakes industrial conflict in France: lots of color (union jackets, banners, smoke grenades), lots of cops, lots of rhetoric, and lots of grandiloquent pledges to defend to the death the moribund white elephant of the hour.

Friday, November 30, 2012

The Payoff


Affaire du Sofitel : DSK prêt à verser 6 millions de dollars à Nafissatou Diallo
A New York, un accord financier devrait être signé le 7 décembre afin d'éteindre la procédure civile.

Thursday, November 29, 2012

DSK Will Settle with Diallo

Well, the US end of the DSK saga may finally be coming to an end. It has been reported that a settlement is in the works with Ms. Diallo. No monetary figure has been mentioned, but we can count on the usual irresponsible sources to begin bandying numbers about. Fantastical tales about what actually did or did not happen will be respun. But no one cares anymore. This story has burned itself out. Good riddance.

Behind the Scenes

Every once in a while, Le Monde publishes an article that pulls back the curtains on public life to reveal some of the private networks that shape the politics we are allowed to see. Ariane Chemin has just written such a piece, revealing what other journalists probably know quite well but we outside observers cannot fathom until some insider is willing to lift the veil, even just a little. Here, we glimpse some of the very interesting relationships that grew out of the Rocardism of the Mitterrand years. "We were the sabras of Rocardism," says one of the group, Stéphane Fouks, who first came to my attention as DSK's publicist after the Sofitel affair. Fouks was part of a trio with Alain Bauer, DSK's security chief, and Manuel Valls, now minister of the interior. The article offers a fascinating glimpse of an evolving nexus of personal and political relationships. With Valls now frequently mentioned as a prime ministerial prospect (despite Mélenchon's audacious self-promotion for the job), this piece is of particular interest for insight into the background of his politics.

Wednesday, November 28, 2012

Sciences po: La Guerre Continue

Two articles in  Le Monde today on the ongoing Sciences po controversy: one by Bruno Latour, the other by Nicolas Jounin. The issues in this imbroglio are complex, confused, entangled, and heavily laden with old grudges and conflicts of personality as well as with important issues of pedagogy, selection, and social change. I'm not about to sort them out in a blog post, but I do think that it's important to note that reforming an institution like Sciences po takes a strong hand, a willingness to make powerful enemies, and perhaps a certain contempt for entrenched traditions as well as rules both reasonable and unreasonable. To judge a reformer like Descoings, one would have to know a lot more about the inner workings of the institution than I do. I can therefore understand Latour's defense of both the man and his project, even if I cannot be sure that he is right to call the many critiques that both have engendered an "assassination." No doubt there is excess, as there always is in cases like this, and just as certainly some of the grievances are surely justified. But what matters here is the future of an institution that plays a crucial role in the selection of French elites and the kind of governance they provide. The choice of a new leadership and a new direction should focus on the desired goals and take account of past errors only insofar as necessary to correct future aims. Richard Descoings should be allowed to rest in peace. His successor need not be cast in his image but should partake of his toughness. (h/t George Ross)

Catalonia Elections

Following up Brent Whelan's guest post on Italian elections, here is a report from The Monkey Cage on the recent elections in Catalonia--a victory for separatists.

Copé and les Pieds-Nickelés

For those with a Mediapart subscription, this may be amusing. But of course the "deal" brokered by Sarkozy to hold a referendum on whether there should be a new leadership election (really? is nothing too absurd to propose any more?) has already been scotched by Copé, who agreed to it, on the grounds that Fillon's formation of a separate parliamentary group and filing of a lawsuit are incompatible with the comity necessary to hold a pre-vote referendum. Yes, indeed, if Copé is good at anything, it is turning low politics, ballot-box stuffing, manipulation of party rules, and strong-arm tactics into high rhetorical principle.

Look, the bottom line here is that both sides cheated. Both sides always cheat in party elections. There would have been no problem if the cheating hadn't resulted in a dead heat. Now Copé is worried, probably because he cheated more than Fillon (see Bernard Girard, who really should correct his inaccurate spelling of Copé's name--perhaps he is confusing JFC with Benjamin Constant and the Coppet group, although that would be a stretch). But if Copé could not win even when he was in control and thought nobody was looking too closely at his tactics, he is undoubtedly afraid that he will lose outright in a fair (well, fairer) election. So he will do what he can to prevent it, especially since he has suffered more in polling than Fillon (who has also lost ground and tarnished his reputation, however). The longer this drags on, the more likely becomes a coup de théâtre such as a Sarko comeback, at least as interim leader.

The spectacle is riveting, though far from edifying.

DSK, The Play: A Must Miss

Read about it here.

Monday, November 26, 2012

Mittal-Hollande Summit

Arnaud Montebourg, who has made a specialty of undiplomatic and unproductive pronouncements, accused Lakshmi Mittal of reneging on commitments made to France, precipitating a crisis. Mittal is on his way to France to thrash the matter out with President Hollande. Now, it is true that Mittal has closed certain operations in Gandrange and Florange that he had promised some years ago to keep running and even beef up with new investments, but his promises were contingent on certain economic conditions, which have not been met. European steel consumption has declined sharply in the crisis, and this may or may not justify Mittal's decisions, depending on the precise nature of the understanding he had with Sarkozy.

Beyond the narrow issue, however, is Montebourg's apparent general view that virtually nothing can justify a plant closure. At a time when the government is emphasizing the need for pro-competitiveness measures, such a position seems short-sighted. I won't pronounce on the economics of the steel industry or the proper way to address overcapacity in steel production. There are complex factors to be considered. But it is economically suicidal for France to insist that capital that could be invested in cutting-edge sectors be poured down rabbit holes. Is there any reason to believe that Mittal is acting in bad faith? If so, I haven't seen it. If Hollande wishes to establish his bona fides with business interests, he must rein in Montebourg, who is serving his own interests with his ill-advised jawboning and not the interests of the government or even of Mittal workers.

A Discussion of the Euro Crisis

Five noted scholars debate the euro crisis and its political ramifications at Harvard's Center for European Studies:


Guest Post: Brent Whelan on Italian Elections

Although this blog is devoted to French politics, the wider European context is always of interest and particularly so in this time of trans-European crisis. Although I try to follow political developments in other countries besides France, an illness for which I am currently undergoing treatment has diminished the time available for keeping abreast of the news. So I am pleased today to present this guest contribution from Brent Whelan, a Boston-based observer of the European political scene and frequent commenter on this blog. As will be clear, Brent's political views differ from mine, but his particular perspective is helpful in illuminating the current state of play in Italian politics.
European political observers accustomed to regarding the Italian electoral system as a comic sideshow might want to take a closer look after yesterday's Democratic Party primaries. What is gradually taking shape in advance of the March/April national legislative election is a classic face-off between two highly credible spokespersons: on the center-right, the darling of the European financial class and its conservative 'reform' program, Mario Monti, on whose behalf strenuous efforts are underway to keep him as premier without the messy business of standing for election; while on the center-left, Pier Luigi Bersani, a reconstructed Communist, centrist minister in Prodi's reform cabinet, and chair of the PD, seems headed toward nomination in next Sunday's runoff. But first Bersani must finish off the frankly Blair-ite mayor of Florence, Matteo Renzi (who prefers to call himself an 'Obamist'), a generation younger, post-ideological, and indisputably charismatic. (Renzi spent the morning of yesterday's first-round election running a half-marathon before greeting voters at the polls.)


Much of the interest in that run-off concerns Nichi Vendola, the not-so-reconstructed Communist, fervently Catholic, openly gay and radically environmentalist governor of Puglia, whose small Left Ecology Freedom (SEL) party is officially affiliated with the PD and whose 15% in the first round will provide the margin of victory for Bersani or Renzi. And Vendola is already exerting that leverage, promising to 'listen carefully' ("ascolteremo con puntigliosa attenzione le parole di Bersani e di Rienzi e orienteremo il nostro sostegno di conseguenza") before throwing his support to either candidate. Will Vendola succeed in pushing Bersani far enough to the left that Italy has a real Left/Right showdown in the spring (the one that Hollande seems determined to avoid in France as he turns his back on the Front de Gauche and promotes austerity policies)? As both Bersani and Vendola are deeply committed to the European project, will they team up to define the 'Other Europe' that Mélenchon and the FdG allude to but seldom describe? With Bersani already leading in national polls, will Italy be the site of a resurgent Left, or its last hurrah? Some though not all of these questions will be defined as Vendola makes his move on Bersani in the next few days.

Hatred

Fillon and Copé must hate each other with a passion to have chosen the suicidal course that is undermining both of them and their party with it. In normal times, one assumes that political passions run across party lines. To be sure, Sarkozy threatened to hang Villepin from a butcher's hook, and the Right has numerous fratricidal episodes in its past. Those seemed different, however, because the protagonists were heavyweights. Fillon and Copé are still politicians of the second rank hoping to make the passage upward. Perhaps that's why their contest is so bitter. Others are calling for a new vote, and the result might indeed be different, because so many militants are disgusted with the leadership that they might sit this one out, if they have not already resigned.

Curiously, the PS treated us to a similar spectacle a few years ago. Few now remember that in the leadership contest to succeed Hollande, Aubry and Royal ran neck and neck, and, then as now, there were widespread (and credible) allegations of fraud. Yet eventually Royal withdrew. She seems to have been promised nothing for her sacrifice, and to have gotten nothing, although we can't be sure that there wasn't a deal involving DSK and Aubry, in which Royal would have gotten a ministry under a DSK presidency. But any such deal would have been rendered moot by subsequent events. The problem for the UMP is that Fillon has already served as prime minister for five years. The only job he wants now is the top one, and Copé is not about to give it to him.

Sunday, November 25, 2012

The UMP Goes to Court

The UMP is now headed to court, Fillon having filed a complaint after Alain Juppé gave up his mission of reconciling the warring Fillon and Copé clans. It is hard to see how the UMP continues as a party after this. If it splits, the big loser is Jean-François Copé, who is more powerful inside the party than in the right-wing electorate as a whole, much less with the general population. But clearly this is a saga that will not play out in a day. The danger, of course, is that the Front National has now achieved its goal of dividing the Right and may seek to pick up bits and pieces of what remains after the explosion. Some will be tempted.

What will Sarkozy do? Will he be tempted to mount his white horse and ride in as unifier? It's not out of the question, but I don't think he will like the lay of the land as it now stands, and he still hasn't amassed the fortune he wants, though he's well on his way, having delivered four major speeches to international business groups for undoubtedly handsome fees.

The rest of us can only sit back and enjoy the spectacle.

Saturday, November 24, 2012

The Failure of EU Budget Talks

Analyzed here. Like every previous French leader, Hollande defended the Common Agricultural Policy rather than brave the ire of French farmers. Is he preparing a more ambitious negotiating position for the crucial December summit, or is he merely playing a tired, cautious, and conservative game to minimize political risk?

Friday, November 23, 2012

UMP on the Brink

As expected, Copé is not going to roll over for Juppé and is resisting the conditions laid down for mediation. This makes a split in the UMP more likely, if not inevitable.

My Novel in Print

My novel Shooting War can now be ordered in print from Amazon and other book stores. There is also a corrected Kindle edition, but this has not yet gone live. The earlier Kindle edition can still be ordered. The printed book is also available through Amazon in the UK, France, Germany, Italy, and Japan.

Thursday, November 22, 2012

A Juppé-Fillon Axis?

Alain Juppé has stepped into the Fillon-Copé dogfight. He will lead an "independent commission" charged with sorting out the mess created by the 50-50 vote split and allegations of errors and irregularities in any number of bureaux de vote. Juppé, one of the founders of the UMP, is unhappy with la droitisation of the party, first under Sarkozy and his advisor Patrick Buisson and now under Copé. Although Fillon, despite having "renounced" the presidency of the UMP, leapt eagerly on Juppé's announcement, Copé was understandably reluctant. But Juppé then issued an ultimatum, and Copé, whose position seemed increasingly untenable, finally gave in, although he will presumably fight tooth and nail to have any recount supervised by the Cocoe, where his supporters are numerous. But Juppé is too canny to accept such a one-sided deal and will undoubtedly press for a compromise, because, as he says, it is no longer the presidency but the existence of the UMP that is in question. All in all, one of the most incredible spectacles of recent French political history.

Sarkozy "témoin assisté"

After a twelve-hour interrogation by un juge d'instruction (a position he tried to abolish in 2009), Nicolas Sarkozy was declared "un témoin assisté." What does this mean?

Ce statut hybride entre témoin simple et mis en examen signifie que s'il y a bien des indices qui suggèrent qu'il aurait participé à une infraction, ils ne sont ni graves ni concordants. A moins que le juge Jean-Michel Gentil, qui arrive au terme de son enquête, ne découvre de nouvelles charges dans les prochaines semaines qui rendent nécessaires de faire évoluer son statut, M. Sarkozy ne sera donc pas renvoyé devant le tribunal en fin d'information.
Interpret that as you will, it's still not a pretty position for an ex-president, although we're getting used to it as par for the course. Savor the photo of Sarko unshaven after his long day at the courthouse, to which he traveled by private jet. Who paid for the flight? Mme Bettencourt?

UMP Finances in Disarray

It seems that there are important financial stakes in the UMP leadership fight. The party is deeply in debt, and François Baroin, who has been surprisingly outspoken in attacking the Copé "victory," is maneuvering to form a second parliamentary group, which would deprive a Copé-Jacob-led rump of one source of financing. (h/t Laurent Bouvet)

Sciences Po: Regime Change

Geneviève Fioraso, the minister for higher education, has stepped into the Sciences Po succession controversy. Following the selection of Hervé Crès to succeed the late Richard Descoings, many faculty members associated with the institution protested the choice, and the Cour des Comptes issued a devastating report on the management of finances, calling for possible prosecution. Fioraso therefore suspended the nomination of Crès and has called for the appointment of a person "beyond reproach" as interim director. This is the culmination of a long series of critiques of the manner in which Sciences Po has been run. It appears that the time for a change of regime has come.

La Droite Forte

An interesting analysis by Françoise Fressoz of the influence of Patrick Buisson, ex-FN, on the Droite forte current within the UMP. Copé claims to embody this ideology, but perhaps he is merely its tool. In any case, it may well split the UMP.

Chris Bickerton sees a fulfillment of Marine Le Pen's strategy to divide and conquer by provoking a split in the UMP.

Wednesday, November 21, 2012

Sarkohack?

Computers at the Élysée were allegedly broken into by US cyberwarriors. More details here.

The UMP Saga Continues

Astonishingly, the UMP vote-counters forgot the votes of 3 overseas départments. Had they been counted, Fillon would have won by 26 votes rather than lost by 98. But according to Copé, the actual vote count is irrelevant, because the result has already been "proclaimed" and "there are rules." Meanwhile, Fillon has "renounced" any desire to preside over the UMP, since he notes, rightly, that neither he nor Copé can claim the requisite moral mandate. He proposes to place Alain Juppé, "une personnalité incontestable," at the head of the party while the two factions fight for its soul. Meanwhile, the rancor seems to be growing, and talk of "une scission" is everywhere.

On France2 tonight, Copé's baratin struck me as even more preposterous than usual. Unflappable salesmanship sets a tone that is quite incompatible with the gravity of the crisis. Meanwhile, Bruno Lemaire, to date nonaligned, let it be known that an end to the "circus" is imperative. But suppose there is none. Which way will he jump? As I said yesterday, any number of reconfigurations of the Right now seem possible. The "circus" may in fact mark the beginning of a new era in French politics. Interesting times.

Tuesday, November 20, 2012

Droites Innombrables

René Rémond saw three main currents of right-wing political culture in France. To judge by the results of the UMP elections, there are now at least twice that many. Looked at more closely, however, the many currents reduce to two: one that wants to make race and national identity a key tenet of the Right, and one that does not, that regards such a move as unwise "both politically and morally" (as François Fillon said in his statement following Copé victory in the leadership contest; my italics).  For all the creative nomenclature (Droite forte, Droite humaniste, Droite gaulliste, Droite sociale, Droite populaire, Droite anti-division), the key tactical question is, How do we beat the Front National? And the respectable Right has two answers: go after their voters where they live, or else continue to reject the FN program and leadership as beyond the pale of reasonable discourse.

Beyond the issue of identity, there is nevertheless a spectrum of views on how to counter the FN's program of protectionism and support of the working class. Here, the nuances among the various currents of the UMP (and of Borloo's neocentrist movement) become slightly more interesting. A number of deputies expressed fear that the victorious Copé would try to lock down the party, suppress dissenting voices on these issues, and press forward with his own version of Sarkozy's droite décomplexée. If he does, they threaten to leave the party--and the threat is not idle. Copé's narrow victory lends substance to Borloo's contention that there is no longer any justification for a single party to claim a monopoly of the right-wing electorate. We can look back to the good old days of the UDF-RPR rivalry.

As for those who believe that Copé is merely a stalking horse for a Sarkozy comeback in 2017, I say this: while it is true that Sarkozy retains substantial support among UMP militants, I have my doubts about a future candidacy. He goes before the judges tomorrow. Even if he survives the several investigations into shady campaign financing allegations, he is likely to succumb to his own desire to earn large amounts of money by capitalizing on his political connections. He stated this as his ambition post-politique. I suspect that he will not be too scrupulous about how he earns that money, and that his choices will make it impossible for him to resume a political career.

As for Copé, I think the UMP has just made a fatal choice. The close vote reveals a deeply divided party, and Copé is far less popular among the broader electorate than Fillon, despite years of exposure at the national level and continuous cultivation of the press. Although Copé "magnanimously" offered Fillon the meaningless position of "vice-president of the UMP," Fillon, who emerged from the contest stronger than he entered it, indicated no particular desire to associate himself with the Copéisé UMP. He now stands equal to his rival as the standard-bearer of the Right and has numerous options to consider in a reconfigured right party lineup. I think we are in for an interesting period of realignment. Copé's victory will be short-lived. One sign of this was the remarkably strong rejection of Copé today by François Baroin, who normally plays his cards closer to the vest.

Monday, November 19, 2012

Copé Wins, Alas

The new leader of the UMP is the old leader, J.-F. Copé, who won by a mere 89 votes out of nearly 180,000 cast. In other words, the party is deeply divided. Copé's election renders more likely a flirtation or worse with the Front National. The ultimate prize is the presidential nomination in 2017, of course, and much can happen between now and then.

Saturday, November 17, 2012

Miracle Soap

Who says the French lack entrepreneurship? A firm has begun marketing miracle soap made with water from the cavern of Lourdes. But the entrenched interests are fighting back. Rather than allow free entry into the miracle marketplace, Les Sanctuaires de Lourdes, the incumbent monopolist of the healing powers of the place, has issued a warning to the upstart competitor.


New PS Leadership

Harlem Désir has installed a new leadership group at the head of the Socialist Party. The left wing has been excluded. Most of the names of the new leaders are unfamiliar, since all the familiar names are in the government. Does this move have any significance? For the future of French politics, no doubt it does, but I'm far too distant from the scene to read the tea leaves with any confidence. Perhaps some of you are more familiar with the inner workings of the party and would like to comment.

Here's a statement from Désir:

La nouvelle équipe doit porter «une orientation claire, celle du socialisme du réel et du réformisme ancré à gauche», a expliqué le premier secrétaire. La feuille de route est simple – c'est celle du président de la République – et le PS lancera la semaine prochaine «une grande campagne pour soutenir les réformes engagées par le gouvernement».
Back in the good old days of the General, this was what was called un parti godillot, a rubber stamp for presidential action. At the time, Socialists didn't think this was what politics ought to be like. I guess times have changed.

Friday, November 16, 2012

Renault Wants Concessions from Labor

Renault is offering French workers "job guarantees" in return for concessions on work time flexibility, work rules, and wages. The company is playing hardball, having already pressured lower-paid workers in its Spanish plants to make similar concessions by invoking competition from still worse-off Romanian workers. So a race to the bottom is on, and in the current climate of no growth and high unemployment, many workers feel they have no choice but to agree to the clawbacks. It's an ugly situation, and it's hard to see how it can endure, given the magnitude of the labor cost differences between north, south, and east in the Renault empire.

Europe Blows It

Europe's initial resistance to the crisis was aided by the automatic stabilizers built into large welfare state budgets, but then European leaders panicked as the very stabilizers that should have prevented collapse swelled deficits and came into conflict with post-Maastricht treaty commitments. Germany enforced a herd mentality. And Paul Krugman documents the result:


Stimulus has disappeared in the Eurozone and the UK, and both are in recession. The US continues to stimulate, and its economy is growing again, albeit slowly.

The German Vision

François Bonnet has an excellent piece in Mediapart analyzing Franco-German relations. He calls it "the Merkel problem." And the nature of the problem is easily summarized: Frau Merkel no longer looks forward to a Greek exit from the euro. She has been convinced that German prosperity depends on the maintenance of the EU. But she also believes that the EU can only be maintained by capitulating to the world view of the German Right:

C’est le problème. Le grand plan désormais proposé par l’Allemagne d’une redéfinition de l’union politique et monétaire n’a rien d’un projet politique. Il sera sur la table du sommet européen de la mi-décembre et cristallise déjà les désaccords. L’ambiguïté tient largement au vocabulaire utilisé : intégration, gouvernance, contrôle démocratique. On pourrait y voir un nouvel étage de la construction politique de l’Europe pour enfin sortir d’une paralysie institutionnelle éloignée des peuples. Or ce n’est nullement de cela qu’il s’agit. Mais bien plutôt de remodeler des institutions en fonction d’une vision économique exclusive de ce que doit être l’Europe : celle de la droite libérale et conservatrice.
And the bottom line:

La question posée aux socialistes peut ainsi se résumer : l’Europe peut-elle être relancée par un projet qui ne soit pas celui du néo-libéralisme ou celui du social-libéralisme ? Une reconstruction peut-elle être engagée, bâtie sur un approfondissement démocratique et laissant le champ libre à de possibles alternatives sociales ? Tant qu’un tel projet – régulièrement brandi par des eurodéputés ou, à sa façon, par le parti socialiste européen – ne sera pas porté haut et fort par l’exécutif français, le problème Merkel perdurera.

Zaretsky on the Socialist Dilemma

Rob Zaretsky uses history to explain the impasse in which the Socialists find themselves.

Thursday, November 15, 2012

The IMF, the ECB, and the Germans

The Troika--IMF, ECB, Germany--managing European financial affairs is analyzed in this post by economist Joseph Joyce.

Wednesday, November 14, 2012

The Beginning of the End for Austerity?

No sooner did François Hollande forthrightly embrace austerity as the policy of his administration than hundreds of thousands of people took to the streets in dozens of cities across Europe, primarily in the southern tier but also in Belgium and France. The magnitude of the protests, the violence that broke out around the edges of demonstrations in many countries, and the sheer visibility of the pain that austerity has inflicted suggest that things may not hold together much longer. What is more, the likelihood of a Greek default, not in spite of but because of austerity, which has actually decreased Greek GDP and increased debt, only exacerbates the situation. Is a disorderly end to the euro in store. Once again, the possibility seems real, as does the prospect of major political upheaval.

Revolt at Sciences Po

Here.

ECB Governance

Sebastian Mallaby faults the governance structure of the ECB--one member, one vote. Germany, he argues, originally saw the ECB as an extension of the Bundesbank and an instrument for promoting its own economic views. But he believes that German influence has been overwhelmed by the sheer number of opponents.

There is some truth in this, but the argument is overstated. Throughout its history, the ECB has for the most part acted in consonance with German views. Its charter limits its freedom of action, its staff, drawn from national finance ministries, is dominated by Germans, and its directors have always had to pass muster with German vettors, even if they have on occasion demonstrated a certain independence, which is only to be expected.

Still, it is true, as Mallaby also indicates, that the crisis has introduced new tensions into the relationship between Germany and the ECB. But where has the crisis not introduced new tensions? And perhaps these tensions are productive, in that German views about economic management need to evolve if the dilemmas that Mallaby evokes are to be overcome.

Tuesday, November 13, 2012

Le Hollandisme: Hollande l'assume

Austerity and competitiveness: these are the banners that Hollande has chosen to fly. He promised to reduce government expenditures by €60 billion (3% of GDP) over the next five years, and he praised the Gallois report.

The staging of the press conference seemed to take a leaf from the White House playbook: Hollande, like Obama and Bush before him, arrived at the podium by way of a long, plushly carpeted corridor. He stood, alone, before several hundred journalists, emphasizing the singularity of his position. His tone was mild, but his words were firm, if at times nebulous.

It was an exercise in power projection as a media consultant might conceive it, but to me it was not a role for which Hollande was cut out. Does it matter? Probably less than a media consultant might think.

Monday, November 12, 2012

The German View of France

According to Jean Quatremer, the reforms announced by J-M Ayrault in the wake of the Gallois Report have pleased the Germans.

Munchau: France Has Misdiagnosed Its Problem

Wolfgang Munchau thinks that France has misdiagnosed its labor market problem by analyzing in terms of competitiveness. He argues that the success of the German model, also misunderstood, is the reason for France's misunderstanding of its own situation. For Munchau, the problem in France is one not of wages but of total factor productivity. In other words, France needs to rejigger its product mix and move up the value chain in the composition of its output. I have taken a similar line in previous posts, but the point needs to be substantiated with a good deal more argument than Munchau provides here (or than I have provided). Munchau further clouds the issue by introducing youth unemployment, which is indeed a major problem but a separate issue from TFP.

Hollande's Moment of Truth

Tomorrow François Hollande will attempt to explain to the country where he is headed. I am eager to find out the answer. In anticipation, I can imagine two possibilities. First, Hollande might announced that he has had a conversion experience on the road to Damascus, that he now believes, as David Cameron does, in expansionary austerity. This seems unlikely, since it is not a doctrine widely embraced by the left, he didn't believe in it before, and no evidence that has emerged in the last six months is likely to have changed his mind--on the contrary. Or, second, Hollande may say that although he would like to stimulate the economy with deficit spending, his hands are tied with several strands of rope: the lack of confidence of the markets, the intransigence of Germany, and the difficulty of crafting a stimulus that will not allow additional government spending to leak out beyond France's borders to stimulate her neighbors rather than create employment at home.

Of course, he's unlikely to take this second position either, because it is a confession of weakness, which is the last thing he can afford right now, with his "presidential image" being questioned right and left. Indeed, he had vowed not to have news conference at the Elysée, but France2 last night reported that his PR advisors had recommended using the palace in order to demonstrate his physical occupation of the seat of power. The hope is that the majesty of the surroundings will magnify and solidify the quavering Flanby.

So what I expect is an onslaught of equivocation, a series of announcements of new initiatives in R&D, worker retraining, etc. There will also be, I expect, a moving paean to solidarity as a way of justifying both tax increases on the wealthy and the shift of the financing of social security to broader-based taxes (both CSG and VAT). There are some fine rhetorical opportunities here to disguise what is essentially a bitter pill that the left's base will be forced to swallow.

In any case, the occasion will be a moment of truth for Hollande, who has the unenviable role of leading the country in a time of profound retrenchment.

Friday, November 9, 2012

Risk Sharing: US and EU Compared

Over at VoxEU, Mathias Hoffmann has a very interesting piece comparing risk sharing among US states compared with risk sharing among member states of the EU. One recommendation that follows from his argument is that European integration could be furthered without complex and politically impossible treaty modifications by taking steps to encourage more cross-border equity ownership in Europe. Currently, European investment takes the form primarily of direct investment or bank borrowing by large firms. Trans-European stock ownership is feeble compared to the US. For Hoffmann, equity ownership is one channel via which asymmetrical shocks can be alleviated by transmission to other states. Worth reading.

The Jospin Report

The Jospin Commission has submitted its report, which recommends limiting but not banning le cumul des mandats, electing 58 of 577 deputies via proportional representation (which favors third parties and is backed by the FN, for instance), and requiring 150,000 citizen signatures rather than 500 signatures of elected officials for a presidential nomination.

No sooner was the report submitted than it was attacked in Mediapart by one of the commission members, the constitutionalist Dominique Rousseau, who submitted his own minority report. Rousseau faults the commission for lacking audacity, limiting its ambitions to what it knew in advance the political class would tolerate, and failing to recognize the degree to which the "bond" between citizens and representatives has frayed. In his view, much more sweeping changes are needed.

Thursday, November 8, 2012

Hollande-Netanyahu Imbroglio

President Obama has had his difficulties with Benjamin Netanyahu. Sarkozy found him insupportable. Now it's François Hollande's turn: in what was supposed to be an "off the record" conversation with journalists aboard his plane (so what happened?), Hollande acknowledged that he was irritated with Netanyahu for allegedly transforming the memorial service for the victims of Mohammed Merah into a "campaign rally."

Elie Cohen Analyzes the Gallois Report and Its Aftermath

Here. A shrewd if somewhat jaundiced reading of the Gallois report and the government's response.

Nissa rebela

I confess to a faible for the city of Nice: the curve of the coastline, the old market, the feel of the streets, the loveliness of the Mediterranean--what's not to like? The politics, perhaps. Now it emerges that the Front National is flirting with the Bloc identitaire of Philippe Vardon, the leader of Nissa rebela, a regionalist/separatist movement. The marriage has not been consummated, however:
"Il n'y a pas d'accord avec le Bloc identitaire, nous avons trop de différences de fond". Ajoutant que si "certains considèrent qu'ils sont plus proches de nos options, ils peuvent nous rejoindre", excluant ainsi toute double appartenance. Ce qui veut dire concrètement que la condition posée par le FN a toute adhésion de M. Vardon au FN est l'abandon de ses engagements à Nissa Rebela (dont Philippe Vardon est président) et du Bloc identitaire qu'il dirige avec Fabrice Robert.

"La Comm'"

In my previous post, I dissed "le storytelling de Hollande." Now, if you want an example of a successful coup de comm', you have no farther to look than to this article in Le Monde. Here, Manuel Valls manages to take credit for the "social VAT" while at the same time modestly--and no doubt quite accurately--eschewing any actual role in bringing it about. Clearly, the consensus behind the revamping of social-security financing in France is far broader than any single politician's campaign position on the VAT. But Valls effortlessly manages to take credit for the change while denying any responsibility for its details. Hollande's people should study this act of remarkable finesse.

"Le Storytelling"

Hollande attempts to burnish his image. Harrumph. Somehow I don't think that dragging a bunch of ministers to provincial venues to sign "contracts for tomorrow" is really going to arrest the slide in Hollande's popularity. If this is what the Left thinks "le storytelling" is, they're in trouble.

Tuesday, November 6, 2012

Piketty on the Gallois Report and Government Reaction

Here. I see here, clearly articulated, one line of emerging critique of the government's plan: it is intellectually incoherent, Piketty argues, "illegible," unclear, etc. Bernard Girard echoes the thought here. Given the total irrationality of fiscal debates in the US, I think "illegibility" is a rather mild criticism, though one can understand the disappointment of intellectuals who had hoped for a complete overhaul of the tax system. A fine idea in principle, but such ambition requires a more resounding mandate than Hollande received (for a program quite different from the one he has enacted, moreover) and a party more united than the PS about where it wants to take the country. Given the political constraints, I'm rather pleased that Hollande has moved, with some dispatch, toward a policy that holds out some promise of mild improvement. Of course the cost-shifting is merely a short-term response to a deteriorating competitive situation; the long-term response will be the real test, and it may be that a government forced to pinch its pennies ever tighter will be tempted to skimp on the investments in R&D, infrastructure, and education that are ultimately more important than the "legibility" of social-security financing.

Gallois Theory

Évariste Galois was a young mathematician who wrote down his famous Galois theory on the eve of a duel in which he died. Louis Gallois, haut fonctionnaire and former head of EADS, has seen his own Gallois theory immortalized almost as instantaneously. He delivered his report yesterday; today the government accepted it, in essence if not in fine detail.

And so the Hollande administration has been brought in short order to a total reversal of its own stance on the "social VAT." One of its first acts was to abrogate the increase in the VAT enacted under Sarkozy, in the last days of the old regime. And now, barely six months later, Hollande will pay for the €20 billion tax credit to employers (in lieu of the elimination of payroll charges advocated by Gallois) by raising the VAT. Is it any wonder that voters are confused about where Hollande is headed? (And to add insult to injury, Mediapart claims, in a somewhat overwrought article, that parts of the Gallois report were written by a card-carrying member of the UMP--the horror!)

On the other hand, the destination is perfectly clear. Hollande has embraced a view of French competitiveness problems that is widely shared by economists, employers ... and politicians of the center-right. Unfortunately, it is a view also only recently attacked by Hollande himself as shot through with "injustice." The choice of the VAT over the CSG to finance the measure is apparently in part due to technical advantages but in part due to the plain political fact that a hike in the CSG appears on each employee's weekly pay stub, whereas a hike in the VAT is felt in a more diffuse way at the eheckout counter. And bear in mind that the financing also depends on an additional €10 billion in government spending cuts, on top of spending cuts already promised to reduce the budget deficit. The arithmetic of the Hollande budget is beginning to look as shaky as Mitt Romney's.

A propos of which, I must go off to vote for Obama before the lines get too long at the polls.

Monday, November 5, 2012

Competitiveness

I feel compelled to mark the beginning of "competitiveness week" in France. As everyone who pays any attention to these things already knows, Louis Gallois has delivered his commission's report, and the government has promised to "do something" in response, though undoubtedly less than the commission has asked for (fracking, for instance, has already been rejected). It's worth recalling a few simple facts: France's balance of payments has been sinking into the red for a decade. France's unit labor costs are high compared to those of some of its neighbors. French labor market rules are relatively restrictive. And France's social safety net is financed, to a greater extent than is the case in neighboring countries, on the basis of payroll taxes.

So the Gallois commission recommends some changes, the most important of which is the transfer of the social safety net burden to broader-based taxes such as the CSG and the VAT. One can quibble about the details and the amounts, but the basic principle is not unreasonable. Elements of the left that argue that the welfare state should be based on solidarity rather than charity are at odds with themselves when they protest that such a change would shift the burden from "corporations" to "people" or "workers." In fact, the burden borne by corporations is already passed on to consumers, and a broader-based financing is more consistent with the principle of solidarity.

To take the argument any further, however, is to get into the deep weeds of economic analysis. One has to ask about the elasticity of demand for the various components of France's national production. One has to wonder about the sensitivity of imports and exports to relative prices. One has to ask whether France would be better served by shifting its resources into new product areas or by defending those in which it has been losing market share, such as automobiles. There is plenty of room for disagreement. What is to be hoped is that the government will begin to lay out a detailed strategy rather than a blunt rejection or approval of the Gallois proposals. Everyone agrees that changes are necessary, but the time for generalities is over.

Thursday, November 1, 2012

Shooting War

A bit of self-advertisement. I wrote a novel called Shooting War. It's about the filming of a novel of the '60s, which brings together the actors in the film with the individuals on whom their characters are based. You can read it on the Kindle and related devices. Order here.

If you like it, please let me know, and spread the word to your friends.

Wednesday, October 31, 2012

Ayrault Se Recadre Lui-Même

Jean-Marc Ayrault has become the primary target of the Right. He already filled that role as the head of a government whose ministers made repeated gaffes, or launched private trial balloons. Each time, he would call the offending minister on the carpet. But now Ayrault himself is the gaffeur, having announced his readiness to debate a return to the 39-hour legal work week. The Right is overjoyed. They see an imminent and ignominious end to the Ayrault government.

Of course there is no issue more highly symbolic than the 39-hour week, even if myth and reality have never coincided on the subject. Here is Denis Kessler, a lontime enemy, rehearsing the Right's indictment. The litany of charges is a mixture of truth and falsehood, and the fact is that French workers average over 39 hours of work per week, while German workers average just over 40. Unit labor costs have not diverged dramatically.

But none of this matters. What counts is the belief, almost universal on the Right, that the Left wrecked the economy with a massive vote pander that achieved nothing in the way of job creation. Ayrault may not have conceded the point, but he might as well have, and the government's attempt to walk back his remarks, starting with Michel Sapin's fatuous contention that Ayrault was merely inviting others to debate the issue and not promising an open mind on the subject himself, simply invited ridicule.

There is no decent way out of this morass, so Hollande had better just move ahead with his program, if he has one.

Sunday, October 28, 2012

What Big Business Wants

Employers of the Association française des entreprises privées, among whom one finds most of France's largest employers, have submitted a plan that they say will help to restore growth. It calls for a 30-billion euro reduction of social charges on the wages of workers earner twice the SMIC or more, to be paid for by an increase in the VAT from 19.6 to 21%. They also want a reduction of the corporate tax to align with the rate paid in other European countries. They also advocate a "pragmatic" approach to the search for shale gas.

This is such a modest and workable program in an age of unprecedented policy proposals that it is hard to see why the government wouldn't grant all the requests, just to be able to say, no matter what happens, "See, we gave you all you asked for." What's more, the proposals make sense.

Of course, Hollande has already dug in his heels against fracking, I think erroneously and prematurely. And he has already indicated a preference for the CSG over the VAT as a replacement for payroll taxes, although it's hard to see any insuperable objection to either, or to a combination of both.

If only such comity existed in the United States. The Socialists, already in trouble with their own electorate, however, may see a trap here and reject the proposal out of sheer political wariness. They shouldn't.

Friday, October 26, 2012

Anne Sinclair "Finds Serenity" with Pierre Nora

As I prepare for a day at the hospital, I am greeted with the absolutely astounding news that Anne Sinclair "has regained her serenity" with the historian Pierre Nora, whose Lieux de mémoire I translated.

Thursday, October 25, 2012

The EU Is Collapsing

Or at any rate, the EU Parliament building in Strasbourg is. The ceiling and supporting structures have developed cracks. Here is Deputy Mélenchon's characteristically mordant account:

J’étais à Strasbourg lundi et mardi. J’y retourne jeudi et vendredi. Mais la session de novembre est annulée. Elle devait avoir lieu à Bruxelles. Malheureusement les piliers qui soutiennent l’hémicycle sont fissurés. Et tout menace de s’écrouler. Cette allégorie de l’Etat de l’Union fait évidemment les gorges chaudes des mauvais plaisants de la maison. Ils sont nombreux. (h/t BrentW)
Mélenchon adds this little jab at the government back in France:

Bien-sûr, la politique choisie mène aux plus grandes difficultés sociales et elle fait le lit de la droite. Elle finira mal. Elle a déjà mal tourné partout. La zapatérisation du nouveau gouvernement est fulgurante !
"Zapaterization": the comparison of Hollande with Zapatero is not new, but the substantive may be.

Banks Healthier?

European banks may have begun their recovery since the ECB introduced its Outright Monetary Transactions. Private investors seem to have taken Draghi's action as a signal that Eurobanks will not be allowed to fail and have tentatively re-entered the market. Spanish bank borrowing from the ECB feel from a peak of 411 billion euros to under 400 billion in September.

Tuesday, October 23, 2012

Sexist Robert?

Did the renowned dictionary deliberately choose female examples for many negative traits:

- Capricieux: « C’est une enfant très capricieuse » (p.145)
- Vilain: « Eve a été vilaine avec sa soeur et elle a été punie » (p.1102)
- Peste: « Quelle petite peste, cette Sarah! » (p.779)
- Peureux: « Eve est assez peureuse » (p.782)
- Inconstant: « Sarah est inconstante dans ses amitiés » (p. 537)
- Impuni: « Elle ne restera pas longtemps impunie » (p.533)
- Moqueur: « Sarah regardait les autres avec un air moqueur (p.674)
- Gourmand: « Sarah est très gourmande » (p.477)
- Insolent: « Sarah a été insolente avec l’enseignante » (p.553)
- Bavard: « Sarah est très bavarde » (p.93)
- Paresseux: « Sarah est très paresseuse, elle n’a pas fait ses devoirs » (p.751)
- Parfait: « Elle est d’une beauté parfaite » (p.751)
- Naturellement: « Les cheveux d’Eve frisent naturellement » (p.692)
- Vexer: « Sarah se vexe facilement » (p.1098)
The evidence seems clear, but say it ain't so, Robert.

La Danse des Cons

Arnaud Montebourg has a knack for self-promotion, or is it self-ridicule. Thus we have him flogging the "made in France" (étiqueté en anglais, bien sûr, pour plus d'effet) and posing for a magazine cover in marinière while holding a Moulinex blender:


This stunt would merely have made him a leading candidate for the weekly roi des cons award. After all, what politician has not at one time or another urged his fellow citizens to "buy home rather than abroad." But the European Commission, ever vigilant for apostates from the Church of Free Trade, could not resist the opportunity to turn this non-event into une danse des cons:


Le commissaire européen au commerce, Karel de Gucht, critique le protectionnisme prôné par le ministre du redressement productif, Arnaud Montebourg, et rejette la surveillance des exportations sud-coréennes réclamée par Paris dans une interview publié mardi 23 octobre par Le Figaro.
"Monsieur Montebourg s'affiche contre la mondialisation, il est protectionniste, c'est un choix. Mais son raisonnement ne tient pas la route. La France ne peut pas, seule, redistribuer les cartes du commerce mondial.", a estimé M. de Gucht, de nationalité belge.
Well, it's perhaps difficult for a Belgian to comprehend economic nationalism, since Belgium is an experiment in survival as an economy without polity. But Montebourg's Monoprix photo op is the small beer of economic nationalism, nothing compared with Villepin's adventures in this arena. When it comes time for the Socialists to choose a new standard bearer, we will see which of today's contenders has chosen the more successful strategy. Will it be Montebourg's parlaying of a nothing ministry into an instrument for staging a presence in a bewildering variety of contexts? Or will it be Valls's more severely classical dramatization of the role of minister of the interior as guarantor of the ordinary citizen's security? Or Moscovici's epicurean self-delight at having graduated to the cour des grands, where he can pose as serious steward of the nation's finances? Or someone else entirely. Some student of French presidentialism should collect the high points of each man's parcours: we are being given an education in the uses of various portfolios in presidential image-making.

Indeed, I would go even farther and say that Hollande's failure to build an image of himself as president prior to assuming office has proved a handicap now that he is in it. He seems not quite sure of his marks, as one would say in the theater, and inevitably looks slightly out of place whenever he tries to fill the stage.

Le Président Thaumaturge

The "hyperpresident" Sarkozy earned that epithet in part because of his hypercaffeinated personality but mainly due to his omnipresence at critical events large and small, from global and regional crises to faits divers of everyday life. François Hollande, the erstwhile "normal" president, apparently feels the need for an image boost to lift his sagging ratings, hence he has been popping up in unexpected places. A woman in labor suffers a mishap on the way to a distant emergency room and there is the president, calling for hospitals closed by Sarkozy to be reopened. It was the sort of shoot-from-the-hip reaction to the fizz of publicity for which many critics reproached Sarkozy. Of course, Sarkozy was saved from many of his more extravagant follies by an almost total lack of follow-through. Hollande may be different in that regard, although budgetary constraints may take the place of fecklessness in his eventual record.

But has this hyperpresidentialism become a structural component of the modern executive? Pierre Rosanvallon has argued that a "democracy of proximity" imposes on leaders the role of accompanying citizens through individual traumas that can be read as symbols of fundamental social issues. A recidivist thus becomes an occasion for considering the flaws of the penal system, while a mother in labor serves as the pretext for pondering the maldistribution of health care resources in France. There is nothing inherently wrong with such executive responsiveness to the quotidian, even if it does suggest a sort of ambulance-chasing practice of national governance.

Does the Bundesbank Want Out of the Euro?

Paul de Grauwe, who is as prominent an expert on European political economy as there is, speculates that the Bundesbank opposes the ECB's outright monetary transactions (OMT), without which there is no salvation for the euro, because it, the Bundesbank, has always opposed the euro project and is trying to lay the groundwork for a German exit, after which the Bundesbank would again be primus inter pares among European central banks, rather than a handmaiden of the ECB.

Sunday, October 21, 2012

Lourdes Flooded

I hesitated a bit over the headline for this post. I wouldn't want to appear to be enjoying a moment of Schadenfreude at the expense of the afflicted, especially as I am afflicted myself at the moment. But really, who can resist the thought of floodwaters receding on l'avenue du Paradis and pompiers having to wash river muck out of the sanctuaries of the famous pilgrimage site?

I recently watched the film "Lourdes" with Sylvie Testud. It delves as deep as a positivist is likely to get in understanding this very curious cult of the miraculous.

Friday, October 19, 2012

Merkel and Hollande Disagree About Agreement

Angela Merkel, it was said, did not like Nicolas Sarkozy, but she was able to feign agreement with him from time to time. Apparently she cannot do this with Hollande. The two no longer even pretend to be discussing the same subjects. Hollande thinks he got a banking agreement in Brussels that will take effect before the end of the year. Merkel things there was a framework established for a future banking union and no agreement as to direct recapitalization of Spanish banks until all the details have been worked out. Hollande flatly rejected Merkel's call for a budgetary czar in Brussels and insists that Europe already has all the fiscal union it needs.

What can possibly alter this destructive cycle in the European discussion? Is it actually worse than before? Perhaps not. Open disagreement is at least informative, whereas veiled disputes merely enhanced the confusion. But I think we will soon see a market run on Spain.

Villepin Backs Copé

Dominique de Villepin has anounced his support for J.-F. Copé in the UMP leadership fight. Those who have always doubted Villepin's judgment will find new reasons to do so in this decision. Villepin at once minimized the significance of Copé's hard right turn, praised him as the leader of a new generation, and dismissed Fillon, who is all of 58 years old, as a has-been of Villepin's own generation, which he is prepared to put out to pasture--until, that is, he is called in from the cold by Copé to assume the position for which he no doubt feels himself destined.

Wednesday, October 17, 2012

A Perennial: Jouyet to Head Public Investment Bank

As if to underscore Hollande's remarks that austerity is not enough (see previous post), Prime Minister Ayrault has announced the nomination of Jean-Pierre Jouyet to head the Public Investment Bank. Jouyet is an old Europe hand: he handled Europe under Jospin and then again under Fillon. France seems to favor such perennial technicians in key economic policymaking positions.

As for the Banque Publique d'Investissement, you may recall that it was originally to have been the Banque Européenne d'Investissement, but Germany and France did not see eye-to-eye on the project, so now it is a France-only bank, seriously undercapitalized, and unlikely to accomplish much beyond financing the pet projects of regional party bosses. Or am I too cynical? There is no shortage of loanable funds in existing banks. The problem is a shortage of projects for which banks are willing to lend in the current climate of deficient demand. So creating a public bank to lend to enterprises that private bankers consider too risky has obvious dangers.

Is Hollande Part of the Problem?

Perhaps it's too soon after my surgery for me to take on the problems of the eurozone, but Hollande's interview with The Guardian is forcing my hand. He is quite critical of Angela Merkel, whom he accuses of putting German domestic politics first, and calls on his European partners to make sacrifices for the continuation of the Union. No sooner has he said that, however, than he gives "short shrift to a German push for the creation of a federalised eurozone or political union."

If that is his position, then he surely owes it to those same partners to spell out how he intends to resolve the crisis in the long run without major institutional change. Instead, he digs at those who have proposed such change: "The institutional issue is often evoked in order to avoid making choices. It hasn't escaped my notice that those quickest to talk of political union were often those the most reticent to take urgent decisions …"

In short, he wants to put all the burden of adjustment on Germany, without offering Germany anything in return. This is a strategy very unlikely to yield results, it seems to me. The crux of the issue is what a federalized eurozone would mean. Germany wants to impose budgetary discipline by means of sanctions with teeth. What Hollande ought to be proposing is a union with a broader mandate, to harmonize social policies, make transfer payments, facilitate labor mobility, and pool investments in research and education. Instead, he simply attacks austerity, as he did in the election campaign, before he implemented the primary instrument of austerity, the TSCG, after taking power.

Once again, it seems that Europe's leading politicians have squandered six months in useless posturing, while the only effective action to keep things afloat has been taken by Mario Draghi. But Draghi has warned that the ECB cannot solve this problem on its own. A political solution is needed--a solution for which he has tried to buy time with his creative financing. But Hollande does not seem to share his sense of urgency: "We are near, very near, to an end to the eurozone crisis," said Hollande. But decisions taken at the last EU summit in June had to be implemented "as fast as possible".

To be fair to Hollande, he does point out that major institutional change was tried in 2005 and failed. So perhaps he is simply being realistic. But in this case, realism seems to be heading straight into a wall.

Tuesday, October 16, 2012

Just a Brief Message

Thanks for all the good wishes. I had surgery this morning and was back home by 4 PM. Feeling pretty good, all things considered. But I will be taking a vacation from real life for a while. Whether blogging counts as real life or virtual life remains to be seen.

Monday, October 15, 2012

Last Post for a While

I have to take an enforced medical leave for the next few days. Nor sure when I'll be back or how well I'll be able to keep up with the news in the meantime. Feel free to comment here on things I should pay attention to when I'm able to.

Sunday, October 14, 2012

Fabius Fact-Checked

It's old news that the TSCG passed by the parliament did not differ by as much as a single comma from the Merkozy pact that Hollande promised to "renegotiate" during the campaign. But the fact-checkers have given Fabius's defense of the pact a thorough going-over and found that even "the growth component" agreed to later by the signatories was already in the works before the election:

Lors du sommet européen du 29 juin, M. Hollande s’était targué d’avoir joué un rôle majeur dans l’accord qui prévoyait un “pacte de croissance”. “J'avais annoncé que je voulais renégocier ce qui avait été décidé, au sens d'y mettre ce qui ne s'y trouvait pas, croissance et mesures de stabilité. Je considère que ce sommet a permis d'aboutir à cette renégociation”, s’était réjoui le chef de l’Etat.
Ce pacte de croissance prévoit l’allocation de 120 milliards d’euros en soutien de l'activité – dont la moitié en réaffectation de moyens existants –, sur plusieurs années, sans creuser davantage les déficits nationaux. Or, les éléments de ce pacte étaient en discussion depuis l’automne 2011. François Hollande a certes réussi à en accélérer l’adoption, mais on est loin de la "réorientation européenne" dont parle M. Fabius.

Muslim Council Charges Copé

The Muslim Council has filed slander charges against J.-F. Copé for his now infamous comments about Muslims enforcing Ramadan by taking pain au chocolat from schoolchildren. This, of course, is only grist for Copé's mill. Muslim anger is comprehensible, but ridicule would have been a more potent weapon than the courts, I think.