France: the choice
by Michael Roberts
It’s only a week to go before the first round of the French
presidential election and it seems that the race is wide open. Only two
candidates can take part in the second round in May. But who will
those two be? Extreme right-wing Front National candidate Marine Le Pen
has been the front runner in the polls over the last year, but her
support has been slipping. Ex-socialist minister and centrist darling
of the bourgeois media, Emmanuel Macron is neck and neck with Le Pen,
both at around 22-23%. The official conservative (Republican) candidate
Francois Fillon should be ahead, but he has been damaged by the
expenses scandal of his wife and children getting huge government-funded
salaries for parliamentary work which they did not do. Even so, Fillon
is getting about 18-19% share of those saying they will vote. The big
surprise in the last few weeks had been the rise of Leftist candidate
Jean-Luc Melenchon, whose polling has leapt from 10-11% to around 19%
now. In so doing, the official Socialist party candidate, Benoit Hamon,
has seen his vote slump to 6-7%.
It is still most likely that it will be Le Pen and Macron in the
second round, with Macron more than likely to win the presidency by some
distance over Le Pen. But all combinations are possible, with the
worst for French capital being a battle between leftist Eurosceptic,
anti-NATO Melenchon and racist Eurosceptic Le Pen.
Back in February I analysed the state of the French economy,
the second-largest in mainland Europe and one of top ten capitalist
economies globally. The profitability of French capital is at a
post-war low (profitability is still down a staggering 22% since the
peak just before the global financial crash in 2007), real GDP growth is
only just over 1% a year, well below that of Germany. The unemployment
rate remains stuck close to 10% compared to just 3.9% in Germany.
Youth unemployment is 24%. Business investment has stagnated in the
‘recovery’ since 2009.
Because of the actions of the French labour movement, inequalities of
income and wealth have not risen as much as in other G7 countries like
the US and the UK in the last 30 years.
Neoliberal policies have been less effective in getting profitability
up and workers down under the thumb of capital. French capital needs a
president that can and will do this now. Can it find one?
If we look at the programs of each candidate, we can see it is
Francois Fillon who offers the best programme for the interests of
French capital. Fillon aims to end the key gain of the French labour
movement, the official 35-week, often firmly enforced. Under Fillon,
workers would have to put in 39 hours before overtime or time-off in
lieu is paid. Fillon would slash the public sector workforce by 500,000
(or 10%), while increasing the working week for those who keep their
jobs. The retirement age would be raised to 65 from 62 now and
everybody would have to work to that age or face pension loss.
Unemployment benefits would be cut.
Severe fiscal austerity would be imposed with a cut in public sector
spending from the (astronomically high for capitalism) 57% of GDP to
50%, with a ‘balanced budget’. The cuts would be necessary because
Fillon wants to cut corporate tax rates to 25% and other ‘burdens’ on
the business sector, while raising VAT for purchases by French
households by 2% pts. He would scrap the current wealth tax on the
rich. One area of extra spending would be more police and more prisons,
while reducing gay rights.
This is an outright neo-liberal program that no French president has
been able to impose successfully in the last 30 years. But French
capital demands it. Unfortunately, for big business, Fillon is unlikely
to make the presidency.
But what of Macron, the ex-banker and socialist minister, the man
most likely to get into the Elysee Palace (the French White House)?
Macron’s program is a mix that attempts to appeal to labour and capital,
as though they could be reconciled. He wants to merge public and
private pension and benefit schemes. He claims that he will get the
unemployment rate down to 7% through an investment plan. And yet he
plans to cut public sector spending and run a tight budget.
Like Fillon, he would cut corporate tax for businesses to 25% of
declared profits. He keeps the 35-hour week, but companies would be
allowed to ‘negotiate’ a longer week. Low-wage earners would be
exempted from certain social welfare levies, a measure that would put an
extra month’s wage per year in the employee’s pocket (but no clarity on
how this would be paid for, except through ‘higher growth’). He too
would boost police and prisons but also provide a ‘payment for culture’
to students and reduce school class sizes. He would cut the number of
MPs and reduce time for re-election of officials, while banning
Fillon-type payments to family members. This programme is thus a mix of
help to business and wishful thinking for labour. But it seems to
appeal to just enough voters over the neoliberal alternative of Fillon.
Both Fillon and Macron are pro-EU and pro-euro. This is the one big
policy difference with Le Pen and Melenchon. Le Pen’s program is a
mixture of racist, anti-immigrant, anti-EU policies alongside pro-labour
measures for the public sector and wages. Le Pen would ‘re-negotiate’
the EU treaty with the rest of the EU and if that failed, call a
referendum on leaving the EU within six months. If French voters
decided to stay in the EU, she would resign the presidency. If they
voted to leave, France would end the euro as its currency and
re-introduce the franc. Such a policy would be shattering for the
French economy and probably sound the death-knell of the EU and the euro
as we know it.
Le Pen would get on with ending immigration, strip many French
muslims of citizenship, revoke international trade treaties and NATO
operations and confine free education to French citizens only.
Companies employing foreigners would pay an extra 10% tax and foreign
imports would be subject to a 3% tax. And, of course, the police forces
would be expanded.
Like the Brexiters in the UK referendum, she claims that she can cut
taxes on average households and raise welfare benefits by saving money
on EU membership and regulations (that has turned out to be a myth in
the UK, where austerity has increased). The number of MPS would be
But Le Pen also aims to help (small) business with lower taxes. And
instead of raising the retirement age, as Fillon proposes, she would cut
it to 60 years, increase benefits to the old and to children, while
keeping the working week at 35 hours and overtime tax-free!
Le Pen’s economic policy is thus anathema to French capital and
attractive to French labour, but combined with racist and nationalist
measures. But, of course, there is no real attack on the hegemony of
French big business. So this policy of raising wages and benefits while
leaving the euro and introducing protectionism, in an economic world of
low growth and a possible new economic slump, is utopian. Neither the
needs of labour nor capital will be met.
When we turn to Melenchon, we see a similar utopianism, if from the
perspective of defending the interests of labour over capital. His
economic program is similar to that of Corbyn’s Labour in
the UK, if going further. He proposes a 100-billion-euro economic
stimulus plan funded by government borrowing and some nationalisation in
sectors such as the motorway network. He says he would raise public
spending by 275 billion euros to fund the plan, to raise minimum and
public sector wages, create jobs to reduce the unemployment rate to 6%
and also, like Le Pen, cut the retirement age to 60.
This extra spending would, Keynesian-like, fund itself from higher
economic growth and employment. But with big business needing profits
to invest, calling for more taxes on business (as well as the rich), may
deliver the opposite of faster growth. At the same time, he too would
cut corporate tax rates to 25%!
Melenchon would also renegotiate the EU treaties, ignore the EU
fiscal austerity pact, call for a devaluation of the euro, take national
control of the Banque de France from the ECB and leave NATO and the
IMF. And following Le Pen, if these measures are blocked, he would have
a referendum on EU membership.
Melenchon’s program is similar to that of socialist Francois
Mitterand (although somewhat less radical than Mitterand’s) when the
latter won the presidency in 1981. He too wanted to take France on an
independent line from the rest of Europe in expanding the economy
through public spending, nationalisation and more taxes on business and
the rich. That program fell down in face of the deep global slump in
1980-2, when financial investors fled France and the franc. The choice
then was for Mitterand to go the whole hog and take control from French
capital or capitulate to neoliberal policies. He chose the latter with
his so-called “tournant de la rigueur” (austerity turn) in 1983. That
choice would soon face Melenchon, in the unlikely event that he won the
Apart from the economic utopianism of Le Pen and Melenchon under
capitalism, they both face an immediate political problem. In June, the
French vote for a new National Assembly, which, at least right now,
would probably elect a majority of conservative pro-capital, pro-EU MPs
who would be backed by a media campaign from big business, the EU
Commission and other EU governments aiming to shackle the new
president. The battle would be on from day one, while the euro and
French financial assets reel from the shock.
But it probably won’t happen.
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