Wednesday, April 16, 2014

Valls Turns Into Hollande

Well, I think Manuel Valls can kiss goodbye to that 58% approval rating. He has just done what François Hollande did on taking office: immediately dashed the hopes invested in him. Just as Hollande promised to renegotiate the TSCG, raising hopes across Europe that he would lead an anti-austerity coalition, so did Valls' initial announcements suggest that he might at last put some additional money into the pockets of people who would spend it, encourage firms to hire by reducing payroll taxes, and in the meantime fend off demands from Brussels and Berlin for drastic spending cuts. But today he announced that the promised €50 billion in spending cuts would not be delayed but would phase in starting in October of this year. These include a freeze on civil service pay hikes, cuts in family allowances, and reduction of other social benefits. At least he had the courage to own the cuts rather than blame them on Brussels. But he also used the false argument of austerians everywhere, that deficit reductions are intended to "help the children" by not overburdening them with debt. The children won't be helped if the economy stagnates for another two or three or four years because of fiscal drags. Worst of all, the prospect of a change of policy direction in the wake of the drubbing the Socialists took in the municipals is now ended. It will be more of the same for the foreseeable future--which may be no longer than the drubbing the Socialists will now surely take in the European elections. Valls may style himself after Tony Blair, but the British leader he now most resembles is David Cameron: he has become the leading exponent of "expansionary contraction."