Europe’s old left has got itself a new hero. Arnaud Montebourg, who was sacked by Francois Hollande as France’s economy and industry minister at the start of last week, has suddenly acquired martyr status by being banished to opposition in the socialist president’s latest purge of the left.
It is possible that Montebourg will end up not just as an icon but also as a winner. He clearly intends to challenge Hollande for the socialist party’s nomination for the 2017 presidential election. Given the party’s leftish culture and the French left’s protectionist instincts, he could well succeed. In the light of Hollande’s abject 17 per cent approval rating, the odds would seem to be against the sitting president.
Yet, this may be precisely the time to buy shares in Hollande. A Montebourg presidency is currently the politics of dreamland, a place that far too many on the left in all countries are too comfortable in. A much more pressing and practical question is whether Hollande himself can turn things around now, in the situation that exists. Clearly, the odds on him succeeding are long. Clearly also, you would not start from here if you could avoid it. But there is a good case for saying that he can. It is difficult to dispute three things about Hollande right now. First, he is still the leader of a nation which, for all the asymmetry that now dominates European affairs, remains the most important other than Germany itself. Second, that he has just taken an enormously high risk — but possibly also with high reward — one-shot gamble to right his ship. And third, it matters hugely to the rest of Europe that he now succeeds rather than fails.
By purging the main ministers of the old left from his government, Hollande and his Prime Minister, Manuel Valls, risk an enduring split in the party that Francois Mitterrand brought together more than 40 years ago. Valls may even struggle to win a confidence motion when the new government comes before the national assembly. Moreover, the choice of Emmanuel Macron as the new Economy and Industry Minister is almost as audacious as Montebourg’s dismissal. To replace your chief economic anti-austerian with a former investment banker, a technocrat with no party base, is either crazy or brilliant. Judging by Hollande’s success rate as president, the former is of course more likely than the latter.
If nothing else, however, it sends a clear message to the party and to business — and to the Germans — that Hollande is up for the battle. It tells them that he prioritises business confidence, that he is prepared to follow a reform agenda and that, on the European Union (EU) level, he is willing to work with Germany rather than place himself very publicly against it, as Montebourg did. All of these approaches make total sense.
Fighting for his future
However, it is very important to understand which battles Hollande is actually fighting. He is, of course, fighting for his own political future. But on the European level his France remains, in spite of the departure of Montebourg, one of the key advocates of a looser approach to the austerity and fiscal orthodoxy guarded by Angela Merkel and the European Central Bank (ECB). Hollande has turned to the centre, but he remains anti-austerity.
Hollande’s critics on the left will say that he has sold the pass on Europe to Merkel and the ECB. In one sense he has. But that may only be half of the story. The other half is that Hollande’s moves seem intended to give him a stronger platform from which to demand that Berlin and Brussels cut France — and not just France — more slack on borrowing and investment. This is a campaign whose time may be coming. The ECB president, Mario Draghi, seemed to be talking in very similar terms in a speech in Wyoming last week. It may not be the anti-austerity (and even anti-German and anti-euro) crusade that some would prefer, but it is nevertheless a fresh challenge — urgent this autumn from Paris’s point of view — to German orthodoxy.
As a critic of that orthodoxy, Hollande has been largely ineffective at the European level. An attempt to put himself at the head of a southern European counterweight to Germany failed and has been abandoned. Now he has been eclipsed on the EU stage by the more charismatic and successful Matteo Renzi, a European progressive who appears to possess the golden touch that Hollande seems to lack. Renzi has emerged as the centre-left’s main man in Europe as France stumbles. Yet, France is still the Eurozone’s second largest economy and without Hollande, the political weight in favour of a more strenuous European growth strategy is that much weaker, probably fatally so.
Last weekend, EU leaders met in Brussels to start divvying up the jobs for the 2014-19 era, in which the commission will be headed by Jean-Claude Juncker. The bookmakers see Donald Tusk of Poland emerging as European council president in succession to Herman van Rompuy, with Federica Mogherini of Italy taking over from Cathy Ashton as foreign affairs high representative. France is pressing for the former finance minister Pierre Moscovici to get a key economic job in the Juncker commission. None of this is exactly to Merkel’s liking. But it reflects, albeit in a characteristically opaque EU way, the sense of a changing tide in Brussels. The fiscal debate in Europe is gradually shifting in a way that Berlin does not like. The credit for that goes to a combination of Renzi, Hollande and Eurozone stagnation.
The leaders met last weekend in gloomier economic circumstances than they were expecting at the start of 2014, when there was optimistic talk of the end of the crisis. This has worried Merkel. The consequence is that the big question in European politics today is not, as in the past, to ascertain what Germany wants. Today, it is to ascertain what derogations from its own orthodoxy Germany is prepared to live with. This does not mean there is about to be an EU economic U-turn. But it does suggest that events are conspiring towards a more general 28-state acceptance that a EU growth strategy is more pressing than before. Hollande is fundamental to that happening. In a curious way, in the depth of his own political weakness, the president of France may have more power than before. It is in no one’s interest that his new strategy fails. So it may be in everyone’s interest, not least the French left, that it succeeds.
— Guardian News & Media Ltd
