Monday, March 31, 2014

The Greens Go Into Opposition

As expected, the reaction to the Valls nomination was quick:

Les écologistes Cécile Duflot et Pascal Canfin ne feront pas partie du gouvernement Valls

La nomination de Manuel Valls à Matignon n'est "pas la réponse adéquate aux problèmes des Français", estiment les ministres écologistes du logement et du développement dans un communiqué diffusé lundi. (AFP)

Hollande's Speech

It was a bizarre performance. Hollande appeared in what I assume was the park of the Élysée but shot in such a manner as to obscure the grandeur of the setting and make it look like someone's backyard, with a few scraggly bushes in the background (actually I think he spoke indoors in front of a "green screen," with his image and the inevitable French and European flags projected onto a background of the Élysée park). He did mention that he had just lost the municipals by a historic margin but only at the end, after announcing that he would not waver one iota from the course he had already set, with the Responsibility Pact as its centerpiece. He promised a reduction of social contributions for individuals as well as firms, but he didn't explain how this would square with his commitment to reduce the budget deficit. His discourse remained firmly gestionnaire with a bit of window dressing about not tolerating stigmatization of minorities and a plea for France to overcome its divisions. This seemed a wan plea. In short, the severe sanction of the polls has left François Hollande tel qu'en lui-même il a toujours été: insufficient.

Kapil on the Election

My fellow political blogger Arun Kapil has always delivers some solid insights, such as this:
After the 2008 elections the PS was looking to be the party of cities, the one with the strongest local base, but now the UMP/UDI have taken that mantle (and with the UDI, led by François Bayrou in Pau, taking its share of communes, meaning that it will be a big center-right player in the coming years) . Even the PS victories in the large aforementioned cities have to be relativized, as the intercommunal administrative structures that have been established over the years, and particularly since the 1990s—and which will progressively supplant the communes themselves in local decision-making—, will also pass to the right.

Valls Is In

Manuel Valls nommé premier ministre, selon Matignon

Au lendemain de la cuisante défaite de la gauche aux élections municipales, François Hollande, qui s'exprimera à 20 heures, a demandé à Manuel Valls, en remplacement de Jean-Marc Ayrault, de former un nouveau gouvernement, selon Matignon.

Changement de cap?

Naturally, there are many voices this morning calling for a change of course in government policy. Benoît Hamon and the Greens have written a letter to Hollande asking him to renounce the Responsibility Pact and concentrate on increasing the purchasing power of workers. François Bonnet in Mediapart suggests that the victory in Grenoble of a Front de Gauche-EELV alliance, which increased its advantage over the PS candidate (who refused to desist in the second round), points the way to a viable policy alternative. Laurent Mauduit, writing the same paper's editorial, says that the problem is that while previous left-wing governments going back to the Popular Front have been forced to "pause" their reforms after running into obstacles, Hollande paused before he began; he veered rightward on day one of his presidency.

All this is a bit hasty. Hollande's real problem is that he has to change his deep nature, his very character. He is at heart a compromiser and temporizer. By compromising and delaying, he has disappointed everyone rather than choose his enemies and make them angry while pleasing others. Now he must decide whom he is going to confront.

Why not confront Brussels? He can do this by reneging on the promise to cut €50 billion from the budget after implementing the Responsibility Pact. The cut in employer social charges should not be rescinded. It won't do any harm to firm competitiveness, though it won't help as much as some expect either. The budget deficit is larger than the government predicted for last year, €4.9 billion rather than 4.1, because expansionary contraction did not work. Spending the €50 billion will add to the deficit, to be sure, but it will put some people back to work and avoid taking money out of the pockets of others. Brussels will be livid, of course, but Hollande can afford to irk Brussels; Merkel will cut him some slack because she's a politician and recognizes reality, not a market ideologue like the Brussels gnomes. But Hollande can't just spend the money. He's got to dress it up with a credible logic of stimulus, investment, R&D, and relief for the most miserable victims of the crisis. Most of all, he has to show that "Europe" is not an immovable obstacle against which states must hurl themselves regardless of the consequences.

In addition, he needs to have a serious talk with le patronat. They're not going to give him a quid pro quo for the break he's given them on social charges, nor should they. But he should require of them a credible growth strategy. How do they plan to compete in their respective sectors? The automobile sector is a case in point. The German companies have revamped their supply chains, outsourced to east and south, and figured out ways to reduce costs without cutting wages at home (restraining wage growth, to be sure, but not cutting). Do the French companies have an answer to this, or are they content to be outcompeted in Europe while salvaging the future by building plants abroad that will contribute nothing to the French economy? Supply-chain restructuring can preserve French jobs, but not all of them, and it will entail considerable disruption at home, hence considerable opposition. Hollande should coordinate his strategy with the companies as the price of their tax breaks.

Finally, he needs to get out more. If people disliked Sarkozy for being always in their face, they dislike Hollande for having disappeared from view. Since Gayet-gate, cartoonists like to depict him hiding under his motorcycle helmet. It's an apt image.

Another Scandal?

La ministre Yamina Benguigui suspectée d'avoir menti sur sa déclaration de patrimoine (Le Monde)

La Haute Autorité pour la transparence de la vie publique va saisir le procureur de Paris. Si les faits sont avérés, la ministre de la francophonie encourt trois ans de prison, 45 000 euros d'amende et 10 ans d'inéligibilité.

Hollande's Problem

Try this online game to pick your own new government. You see what Hollande's up against. If you had to pick from this rogue's gallery, how could you possible meet the expectations of the country? My advice is to set France on its ear by choosing a totally unexpected prime minister: Louis Gallois (make the left howl but strengthen your cred in the center and with the business community, whose cooperation is essential). Of course, he might achieve the same end by choosing Pascal Lamy as PM, and he's already in the mix.


Pascal Riché argues (while admitting to a certain bad faith in doing so) that the FN didn't do all that well, not really, mmm, maybe, you know, with all due allowances ...

Map of the Debacle