Thursday, 27 December 2012

FRANCE: The greatest dilemma of Hollande's presidency: Reformer or Leftist?

After six months of Socialist rule in France, a fierce and crucial debate, is dominating the media to suss out whether the french President, Francois Hollande, France's first Socialist president in 17 years,  is a reformer or a leftist. Nobody seems to know until know. This is not just a theoretical debate, but a crucial one to understanding where France is heading in the midst of a prolonged economic crisis.

Although the French have been familiar with Hollande for decades, many find themselves wondering who exactly they have elected: A reformer? A traditional Socialist? 

There's the Hollande whose party knows him as a Social Democrat and a pragmatist, and there's the man who not only promised during his campaign to reduce retirement age for some French workers back down to 60 and to increase taxes on income above €1 million ($1.3 million) to 75 percent, but also actually implemented those changes once he was in office.

The French president surrounds himself with members of the classical Left, for example, his minister for "Industrial Renewal," populist Arnaud Montebourg. When Montebourg heard French carmaker PSA had decided to close its Peugeot factory outside Paris, the minister reacted with a rant against the company and demanded for the government to intervene.

On the other side of the equation, one of the president's closest advisors is former Rothschild banker Emmanuel Macron, who is said to have responded to Hollande's budget law imposing a 75 percent tax on the country's highest earners with a memo that read, "That's like Cuba but without the sun."

It's impossible to know which of these people Hollande listens to, or when and why. The president doesn't want to pin himself down to a single course of action, which can be interpreted either as a sign of his open spirit -- or a lack of direction. No one can say for sure whether or not Hollande has opinions of his own or whether F. Hollande is a Social Democrat or Leftist.

France's economy, for decades, has found its attractiveness in capitalism and finding the right balance with a Social government, in the midst of economic crisis, has been F. Hollande's dilemma.

Democrat socialist contrast social democracy with democratic socialism by defining the former as an attempt to strenghten the welfare state, and the latter as an alternative socialist economic system to capitalism. In social democracy, capitalism could never be sufficiently ''humanized'', and any attempt to suppress the economic contradictions of capitalism would only cause them to emerge elsewhere. For example, attempts to reduce unemployment too much would result in inflation, and too much job security would erode labor discipline.

Having included €20bn in new taxes in its 2013 budget, French Social government fears ''shock'' action demanded by business, which wants social charges on jobs shifted rapidly on to direct taxes and spending cuts, would stall the economy into reverse.

Unemployment in France is over 10 percent, national debt is 90 percent of gross domestic product, the economy is barely growing and public spending is at 57 percent of GDP. This is very much a country in need of restructuring. It remains unclear whether France will truly comply in 2013 with the Maastricht criteria, which stipulate a maximum of 3 percent new indebtedness.

During his presidential campaign, Hollande often made it sound as if he could reform the country effortlessly, talking of "renewal" rather than of the painful measures that would be necessary to achieve it. Many of his campaign promises gave the impression that there was money available, just waiting to be given out. But six months gone, he has done nothing at all.

Socialist of the classical, orthodox and anlytical variations argue that beacuse social democratic programs retain the capitalist mode of production, they also retain the fundemental issues of capitalism, including cyclical fluctuations, exploitation and alienation. Social democratic programs intended to ameliorate capitalism, such as unemployment benefits, taxation on profits and the wealthy, create contradictions of their own by limiting the efficiency of the capitalist system by reducing incentives for capitalists to invest in production.

Here, perhaps, lies the greatest dilemma of Hollande's presidency.
In the midst of the economic crisis, France's Socialists are confused. The minister of industrial renewal is calling for nationalization of some industries and ''deglobalization'', while the president shies away from necessary structural reforms.
Failing to walk on his shoes of ''reformer'' and ''leaning toward ''Left-wing'', the French Socialist President in 17 years, has abandoned his Social Democrat stance and become more of a liberal capitalist.
As the saying in France goes '' In France we don't have oil, but we have ideas'', maybe F. Hollande is revolutionizing a new concept of '' Social rule in France''.
By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist
Photo-Credit: Wikip├ędia. French President, Francois Hollande.