Saturday, June 9, 2007

Alain Juppé

One key race to watch tomorrow is that of Alain Juppé in the 2nd circonscription of the Gironde. Royal captured more than 54 percent of the votes in this district in the second round of the presidential election, so it may not be easy going for the minister of the environment despite his substantial local base (he is mayor of Bordeaux), prominence, and super-ministerial position in the Fillon government. To defeat him would allow the Socialists to claim a victory of sorts, since Fillon has said that any minister who runs for a seat as deputy and fails will be sacked.

Christine Boutin

At first sight the choice of Christine Boutin as minister of housing and cities seems odd. A politician distinguished primarily for her opposition to abortion and same-sex civil unions, she heads a small party of "social conservatives" known as the Forum des Républicains Sociaux and had considered running for the Elysée herself before stepping aside in favor of Nicolas Sarkozy. Her traditionalist Catholicism would seem to make her the odd woman out in a nation of anticlericals (on her appointment of a priest to her staff, see yesterday's comment here).

Yet some of her lesser-known commitments make her choice for the post less peculiar, perhaps. For one thing, she favors a guaranteed minimum income in the form of what she calls a "universal dividend." This puts her in the company of such figures of the European intellectual left as Philippe van Parijs and Claus Offe, who favor a universal basic income (much higher, to be sure, than Boutin's proposed 330 euros per month, but the principle is the same: an expression of social solidarity and refusal of exclusion).

For another, she is a champion of prisoners' rights and improved conditions in the prisons. Finally, she is virtually alone on the right of the political spectrum in wanting to make the right to decent housing un droit opposable, that is, a right guaranteed in law and giving grounds for litigation if the government fails to provide.

But perhaps her most signal qualification for the post is her willingness to enter into dialogue with religious Muslims. As a Catholic fundamentalist, her views on the foundational role of religion and its priority over politics have at least that in common with certain Muslim views. She has attended meetings and received the applause of the Union des Organisations Islamiques de France (UOIF), which is close to the Muslim Brothers and considered a more radical element within the Conseil Français du Culte Musulman (CFCM). (The CFCM is the body that represents the "Muslim community" to the state; it was created at the behest of Socialist Jean-Pierre Chevènement but raised to its present status by Nicolas Sarkozy in his previous position as minister of the interior and religious organizations [cultes]. Fouad Alaoui, the head of the UOIF, is the number two in the CFCM at the moment.)

Boutin is thus well-placed to serve as an emissary to Muslim groups, to which she has none of the a priori hostility characteristic of most republican politicians. She is also relatively expendable: if she makes a misstep or fails in her overtures, she can be replaced without great damage to the president, with whom she is not closely associated.

Foreign Direct Investment Disguised

Brad DeLong has a very smart article over at Project Syndicate. He notes cases in which foreign investment in the United States, though essential to sustaining our enormous current account (trade) deficit, nevertheless arouses significant domestic political opposition when foreigners want to control US firms rather than simply buy US financial instruments. But this opposition, while it blocks the normal operation of financial markets, simultaneously creates an opportunity for clever intermediaries, who step in to act as domestic agents for foreign capital. He cites the Blackstone Group as a case in point.

Now, economic nationalism is not peculiar to the United States. France is often accused of being a prime exemplar of the malady. When Mittal Steel tried to buy Arcelor, even politicians normally labeled "agents of Anglo-Saxon neoliberalism" by their anti-market antagonists thundered against the deal, which eventually went through anyway (and the thunder, loud in public, may have been rather more muffled in private). Perhaps a more interesting case in light of DeLong's remarks is that of the Marseille-Corsica ferry line SNCM, which was bought by Butler Capital Partners. Although William Butler, the French-American principal in the firm, had French roots, he acted as a front man for a private equity firm with international investors (which did not go unnoticed by, or please, L'Humanité). Still, Butler's role, and the usefulness of his close relationship with Dominique de Villepin in brokering the deal, suggests that opportunities of the sort that DeLong anticipates will be plentiful in France in coming years.

As I noted the other day, France attracts more than its share of foreign direct investment, despite its reputation for being unfriendly to foreign investors. The bitterness of the Arcelor and SNCM controversies suggests that this reputation is not altogether undeserved. This environment only enhances the opportunity for well-connected financial intermediaries, however. "Capital laundering" will likely be a growth industry.