The rift in the French government speaks more broadly to what the left-wing narrative should sound like on the austerity obsessions of Germany and the European Union

The rift in the French government speaks more broadly to what the left-wing narrative should sound like on the austerity obsessions of Germany and the European Union

From afar the actions of President Hollande of France seemed to happen in a split second. First we hear there’s a left flank in the ruling party that is causing a ruck, then the whole government is dissolved. Enjoying my bank holiday, I wondered whether Hollande wasn’t just throwing his toys out of his pram?

Turns out he was. Arnaud Montebourg, the now former economy minister, has always been a thorn in the side of Hollande, but by that we mean to say he has always reminded Hollande of where he went wrong on the economy, or in other words how he defied the French public by going back on his promises.

Hollande is the most unpopular French president in living memory, this is his second government revamp since the end of March; should he not have been asking himself just how bad that will look? To slightly modify an old truism, if a government is re-jigged twice in a six month period then it makes Hollande himself look unfit to govern, not his party.

But what is so controversial about what Montebourg is saying? He has called the austerity measures in France and wider Europe a “financial absurdity”, has accused Hollande of undermining purchasing power in favour of cutting budgets, and of taking the wrong course of action on the economy, as opposed to what Montebourg himself has previously called a “moderate and balanced” alternative.

Looking at what is going on in France at the moment we should resist supposing it is a French-only issue. The pleas that Montebourg has made, as well as other members of the ruling socialist party in France, including now education minister Benoît Hamon and culture minister Aurélie Filippetti, are pleas that right-minded people from all European countries should be making of their governments.

As Montebourg has said, the deficit-reduction measures carried out all over Europe and the US since the 2008 financial crisis have “crippled economies”, and it is absolutely ridiculous that a socialist party should turn its back on principle, and the promises it originally made to its electorate, to suit the “obsessions of the German right”.

Montebourg has said that his country is free, but is not demonstrating this fact. Indeed a two-pronged attack on the freedom of European countries is currently taking place: firstly the European Commission, an unelected body, initiates and executes legislation, with the European parliament merely providing the appearance of democracy; second, those countries then kow-tow to the austerity measures of Germany, at the expense of the citizens’ will.

Instead of resorting to what Paul Krugman has previously called the confidence fairy, which in part hopes (or dreams) that markets reward countries with lower borrowing costs if it cuts spending and reduces deficits, Montebourg has diagnosed it correctly, saying that the power of growth should be put back into the hands of people through purchasing power: how do you do that? You increase their share of their nation’s spending.

That’s exactly what the social democrats in Germany want for themselves. In 2013 they advocated on behalf of demand-enhancing measures such as an $11.50-per-hour minimum wage for Germany and elsewhere in Europe. Did Merkel listen? No.

Instead, workers in Germany have seen next to nothing in return. As Costas Lapavitsas pointed out earlier in the year, Germany, at the top of the EU hierarchy, enjoys unprecedented power across the European continent, and extols the virtues of austerity, while German workers see either pay freezes or slow rises.

Montebourg points to the UK and the US for economies that have turned the tables and started to grow, but this is a poorly executed point for what he is trying to suggest: neither this country nor the US have extended the recovery to the vast amount of working people in it, still in debt themselves, still seeing their wage share shrunken, and having to carry out personal austerity measures like cut down on essentials.

But his wider point is correct: why should European countries buckle to the austerity obsessions of Germany and the European Union. We need to put the power of economic growth back into the hands of the wider population, and in the meantime President Hollande needs to rethink his priorities.

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