Saturday, November 23, 2013


Tensions are running high within the Ayrault government. Arnaud Montebourg refused to share a couch with his prime minister and other senior colleagues the other day, despite the presence of cameras to record the scene. Now Pierre Moscovici has given signs of displeasure at the PM's proposal to make changes at the finance ministry in furtherance of his new proposal to complete a thorough overhaul of the French tax system by 2015.

Make no mistake: a thorough tax overhaul is essential. The government's approach to budget-balancing by laying on new taxes, and particularly regressive taxes like the VAT, has been counter-productive. A tax revolt is brewing. I heard plenty of grumbling about tax hikes during my recent trip to Paris (the atmosphere seemed eerily familiar to my American antennae). But it's surprising that the initiative seems to be coming from Ayrault, whose forte, if he has one, is not economic policy. As usual, there is considerable lack of clarity about what the plan is, who initiated it, and even whether or to what extent the president supports it. Illegibility is a hallmark of the current regime.

It may be that there is a lot of behind-the-scenes maneuvering in anticipation of a remaniement. Or it may just be another reflection of the apparent confusion that has sapped confidence in Hollande's leadership.


Helen Devries said...

It seems to me that Ayrault knows that his last chance to maintain himself in office is to knock out all the candidates for his post by giving hope of a policy for which the electorate actually voted.

Hollande doubtless will cut the legs from under him in due course.

I may not be one of your blogging friends...have no chance whatsoever of dining with a French ambassador....but I am certainly in touch with la France Profonde...and its voice is beginning to be heard.

Mitch Guthman said...

@ Helen Devries,

I was as happy with Hollande’s election as anyone not named Hollande or Trierweiler but it really is true that the only thing he promised during his election campaign was that he was not Nicolas Sarkozy. Nobody really was interested in pinning Hollande down in the first round of the election concerning his thoughts about the economic crisis, the euro or the policies of Nicolas Sarkozy (which, apparently, he liked a lot and has rarely deviated from them as president).

It seemed to be enough for the French that Hollande wasn’t Sarkozy. Turns out, this was a mistake. The left, in particular, would have been much better off voting for a genuine centrist like Bayrou who actually featured an economic policy more responsive to the their concerns. But for some reason, it seemed to me that Bayrou couldn't rouse himself sufficiently to actually participate in the election and so the second round featured Nicolas Sarkozy (who also claimed to be in touch with la France Profonde) somebody who wasn’t Sarkozy incarnate but who evidently favored his policies and seems to be pursuing them insofar as possible.

As to whether Hollande will undercut Ayrault’s new policy initiatives, who knows? Probably not.

Doing so would force Hollande to annunciate actual policies. He would have to implement them effectively. He would have to make all the clowns he appointed as ministers toe the party line and crush those who don’t and replace them with people who aren't clowns.

Frankly, Hollande seems never to have been in control of either the circus or the clowns. He is neither ringmaster nor clowns. He is simply le flamby.

Anonymous said...

The paradox is the following, I would suggest:
- Ayrault annouced a global tax reform, but has no idea, no principle to propose - and he is meeting with the unions to try to get suggestions and build consensus
- Hollande (and his core team) is fully aware that the taxation has reached unprecedented levels and has become an economic impediment to any recovery but he cannot say it to its core constituency (which is made of the lower parts of the middle class and some parts of the working class that has not chosen to vote for the extreme-right)
- the socialist party is divided between an old guard which considers that the upper classes will never pay enough taxes and a right wing which court the middle class and all the people not working in the public sector
The most likely outcome: nothing - no reform, no change, and increases in the tax rates to try not widen the deficits.