Saturday, December 1, 2012

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.


Mitch Guthman said...

I’m less troubled by the merits of this policy choice than by how Hollande found himself in this position. Either he fundamentally misunderstands the idea of “good cop, bad cop” or he has no control over the people in his government (most particularly Montebourg who frenetically bounds from place to place and topic and topic in a desperate search for the press coverage he craves, much as an addict desperately needs narcotics).

I know you laughed at Mélenchon’s saying that he was ready to be prime minister but there is a logic to it that appeals to me. Hollande has tried to be his own hatchet man and to menace his political opponents (inexplicably, for example, it was he and not Montebourg who brought pressure to bear with the mention of nationalization) but, really, he just seems like a powerless human pudding siting serenely watching events unfold around him. What he needs is somebody who scares the bankers, the eurocrats and conservative Germans to act as his foil. Nobody in France today can put the fear of God into the riches better than Mélenchon.

Robert said...

Don't mean to hijack the thread, but another possible challenge for Hollande on the horizon: JF Cope is calling for an anti-same-sex marriage demonstration on 13 January.

I assume one of Cope's immediate goals is to charge ahead, leave the intra-party election dispute behind and present himself as leader of the UMP and the entire opposition -- with a wink not just to

Two things, for me, will be interesting to watch: First, what will Fillon do? Will he support this demonstration, having publicly stated he opposes same-sex marriage -- although he would find a referendum on that issue "divisive."

Also, will a large enough demonstration put enough pressure on the government to either drop same-sex marriage or seriously water it down (on matters related to adoption, for instance)? NB also, SSM is apparently less popular now than a year ago (58% in France support it now against 63% in 2011).

As we all know, demonstrations in France can go a long way towards determining whether a bill actually becomes law and whether a law, once it passes parliament, gets implemented -- remember Contrats de Premiere Embauche, anyone?

Robert said...

Sorry: Please disregard the words "with a wink not just to" at the end of the second paragraph

Anonymous said...

No demonstration has a hope of succeeding unless youth is with them. And on this, most young people aren't.
January 13 has shaped as an important date for a month now - at the latest anti-gay mariage demonstration, the word was "le 13 janvier on fait sauter Ayrault" which roughly means "Jan 13 we get rid of the prime minister".
This explains why approval for same sex mariage is down in the polls: pro-UMP voters who previously supported the measure now feel that it's a wedge issue, and disrupting the government is more important than defending an issue that, sure they're not against but which doesn't really matter to them.