Thursday, August 11, 2011

Juppé Speaks the Truth About the Golden Rule

When Alain Juppé was still on the outside of government looking in, he quite clearly expressed the reason why the "golden rule" that Sarkozy wants to make the centerpiece of French fiscal reform is nonsensical eyewash:

Interrogé, page 158, sur la manière de remettre de l'ordre dans les finances de la France « sans risquer de la plonger dans la déflation », voici ce que répondait Juppé :

« Ce sera extrêmement compliqué. L'une des réponses, dit-on, serait d'inscrire dans la Constitution, comme les Allemands l'ont fait, qu'on n'a pas le droit de dépasser un niveau d'endettement ou de déficit supérieur à un pourcentage donné du PIB. Je ne suis pas contre, mais je n'y crois pas trop.
Cela ne consisterait qu'à se faire plaisir et on expliquera, à la première crise grave, que des circonstances exceptionnelles font qu'il n'y a plus d'autre moyen que de violer la Constitution. La nécessité comme la facilité l'imposeront. Il n'y aura personne ou presque pour s'y opposer et il suffit, pour s'en convaincre, de voir ce qui s'est passé avec le Pacte de stabilité et de croissance au respect duquel tous les Etats qui ont adopté l'Euro s'étaient, pourtant, obligés par traité.
Là aussi, il y avait des pourcentages de déficit et d'endettement au-delà desquels on ne devait pas aller et qu'est-ce qui s'est passé ? Tout le monde s'est affranchi de cette règle sous le coup de la crise financière et même, en réalité, bien avant. On a maintenant beaucoup de mal à y revenir et cette idée d'obligation constitutionnelle n'est donc pas la panacée, même si ça peut faire du bien dans le paysage. »

One might say that this passage exemplifies the difference between the American right and the French right. The French right has many politicians who, when not in office, are quite capable of thinking intelligently and stating plain truths forthrightly. The American right is now so besotted with its antistate ideology that it has become what the French right used to be, "la droite la plus bête au monde." 


Robert said...

The US right, "La droite la plus bete au Monde?" Perhaps, but also, at the moment, the most successful.

bernard said...

I have little patience myself with the right anywhere. However, I think this is going too far: sure, the tea-party nutters have taken the republican party hostage in the US, but there still are republicans in the US who can think. They are simply being silenced right now by the nutters. Once the nutters have failed miserably as they certainly will, the sensible voices will come back equally certainly.

As for Mr Juppé, who indeed has never been an idiot, he is extremely well placed to make these common sense remarks, having lost his job as prime minister in the 1990's after essentially trying just such a large fiscal consolidation cum reform agenda, and thus faced the wrath of a massive strike supported by most people. He learned then, I suppose, that you cannot force reform in a democracy on a population that simply rejects it.

In short, Juppé was a pure technocrat in the guise of a politician who hit the brick wall full speed. Being highly intelligent, he has now learned from his personal experience.

FrédéricLN said...

All of this is true (Juppé's piece and these comments).

But a precise rule in the Constitution, requiring a certification of the budget by the Cour des Comptes, would yet work — as soon as 60 députés or sénateurs want to (that's 7% of their number).

They could bring a budget to the Conseil Constitutionnel and obtain its cancellation. That's as strong (and smarter, I think) than the US legislation on a debt ceiling!

Just one thing: such a legislation is already enforced in France for all local authorities: only investments can be paid by borrowing money. If a local authority votes a budget that is not balanced in this meaning of the term, the State (namely the Préfet) cancels the budget and may, as far as I know, take direct control of the authority (mise sous tutelle).

The only new thing would be that the rule of law would also be applicable to the State Administration it self, thanks to the growing power that has been given to the Conseil Constitutionnel since the Giscard d'Estaing presidency.

MYOS said...

Right now, the American right seems in the middle of a "nutty revival". Seen from the outside, it's as if some citizens and politicans don't believe in facts, or reason, or logic. I love Art's expression "besotted with its antistate ideology". I was watching my MadMen Season 3 DVDs the other day and there was a discussion from the upwardly mobile young men complaining that if they made $70,000 (which is like about a million a year in today's dollars) they'd be taxed 81%. Wondering what the State could do with this kind of revenue and whether so many people would scream if it had money to do good with (and people who are wealthy would still have their house in the Hamptons and their speedboats. :) )
There are some intelligent people on the right in the US too, they're just being silenced right now.
In France I'm not sure. I think the "la plus bête du monde" also implied an ability to shoot yourself in the foot.
The French left seems quite adept at it, too. From this article (below) I gather that among the various PS leaders, only Royal and Valls realized that we're in the middle of a MAJOR crisis. Apparently Martine Aubry, with an amazing sense of timing, published a column about contemporary art on Saturday.