Le Daily Telegraph du 21 mai 2013 a publié sous la plume d’Ambrose Evans-Pritchard , un article prémonitoire à la veille des élections européenne en France qui mérite une attention particulière. Pour un lecteur français, lire cet article est un exercice qui frise le masochisme si on fait abstraction des mises en gardes inlassablement proférées dans Russeurope, le blog de Jacques Sapir. Dans le cas contraire c’est une page de réalisme pour laquelle nous étions préparés.
«By a horrible twist of fate, Europe’s political Left has become the enforcer of reactionary economic policies. The great socialist parties of the post-war era have been trapped by the corrosive dynamics of monetary union, apologists for mass unemployment and a 1930s deflationary regime that subtly favour the interests of elites.
One by one, they are paying the price. The Dutch Labour Party that fathered the « Polder Model » and ran Holland for half a century has lost its bastions of Amsterdam, Rotterdam and Utrecht, its support dwindling to 10pc as it meekly ratifies austerity policies that have led to debt deflation and left 25pc of mortgages in negative equity.
Contractionary policies are poisonous for countries leveraged to the hilt. Dutch household debt has risen from 230pc to 250pc of disposable income since 2008, while British debt has fallen from 151pc to 133pc over the same period. This calamitous development in the Netherlands is almost entirely result of the EMU policy structure, yet the Dutch Labour Party has no coherent critique because its pro-EU reflexes compel near-silence.
Old Marxists now rebranded under the Socialist Party have eaten into their flank, running at 20pc with daily broadsides against the myopia of pro-cyclical EMU deficit rules at a time when more than half the currency bloc is stuck in depression, albeit one punctuated by short episodes of seeming recovery. The Netherlands relapsed yet again in the first quarter.
« The Socialist Party has never believed in the euro and we don’t believe in it now. We must therefore stop offering up ever more sacrifices in order to maintain it, » said Dennis de Jong, the party’s leader in Strasbourg. He calls for a « Plan B » to dismantle the currency union in an orderly fashion, with capital controls if need be.
Each country is sui generis. The Panhellenic Socialist Movement (PASOK) that steered Greece to democracy after the colonels is down to 5.5pc, a dead shell displaced by the hot-headed Syriza party of Alexis Tsipras, now leading at 25pc with vows to tear up Greece’s EU-IMF Troika Memorandum and stiff creditors.
PASOK deserves its annihilation. It conspired in the backroom coup of November 2011, agreeing to EU demands to overthrow its own prime minister and annul Greece’s referendum on the bail-out. It recoiled from a cathartic and necessary showdown with Brussels, too frightened to risk ejection from the euro. That referendum is now being held. Mr Tsipras has turned the EU elections this week into a verdict on debt servitude.
One can understand why the Left in small countries may feel too weak to buck the EMU system. The mystery is why a French Socialist president with a parliamentary majority should so passively submit to policies that are sapping the lifeblood of the French economy and destroying his presidency.
Francois Hollande won the presidency two years ago on a growth ticket, vowing to lead an EMU-wide reflation drive that would lift Europe out of slump. He promised to veto the EU Fiscal Compact. He asked to be judged on his record in « bending the curve of unemployment », and to his chagrin the people are holding him to his word.
The jobless rate has risen from 10.1pc to 10.4pc (Eurostat) since he took office. The economy shed a further 23,600 jobs in the first quarter as GDP growth fell back to zero. Some 57,000 jobs have been lost over the past year. Mr Hollande’s approval rating has in turn crashed to 18pc in the latest Ifop poll, the worst ever for a French leader.
Nothing has come from his New Deal rhetoric. He capitulated on the Fiscal Compact, agreeing to a straitjacket that obliges France to cut its public debt every year by a fixed amount for two decades until it is has fallen to 60pc of GDP, regardless of demographics, or the level of private sector deleveraging, or the investment needs of the economy at any given time. It is perma-slump written into EU law.
His presidency has been a horror show of austerity packages, one after another, a vicious cycle of higher taxes that abort recovery each time and become self-reinforcing as the multiplier does its worst. There has been net fiscal tightening of 3.5pc of GDP over the past two years combined, yet the deficit has refused to close, as critics warned would happen without monetary stimulus from the European Central Bank to offset the squeeze.
Mr Hollande’s response has been to double down on austerity, but fine-tune the composition. He has bowed to demands from Brussels for another €50bn of retrenchment over three years. This time the axe will fall on public spending, a record 57pc of GDP. There will be sweeping labour reforms, his variant of the Hartz IV shock therapy that screwed down German wages a decade ago. He has made his peace with business. But austerity will grind on no matter how it is sliced.
Mr Hollande helped lead a Latin alliance to confront the deflators when he first took power, forcing Germany to lift its veto on ECB action. This momentary display of grit brought about the Draghi back-stop plan for Italian and Spanish debt in August 2012, with much help from Washington. He did not follow through, and Spain has gone its own way, fancying itself the Prussia of the South or new Latin Tiger.
The ECB is once again sitting on its hands, trifling with deflation. It is letting credit contract at a 2.4pc rate, hiding behind its new mantra of « creditless recoveries », and has let M3 supply growth stall on a six-month basis. It has let passive tightening occur as its balance sheet shrinks by €800bn, and as the euro ratchets up, by 8pc against the yuan and 15pc against the yen in a year. Much of the world is trying to hold down currencies and export deflation. Europe is left holding the parcel.
The French nation does not have to accept economic asphyxiation. France is the beating heart of the Europe, the one country with the civilizational stature to lead a revolt and take charge of the EMU policy machinery. But to call Germany’s bluff with any credibility Mr Hollande must be willing to rock the Project to its foundations, and even to risk a rupture of the euro.
This he cannot bring himself to do. His whole political life from Mitterrand to Maastricht has been woven into European affairs. He is a prisoner of Project ideology, drilled to think that Franco-German condominium remains the lever of French power, and that the euro is what binds the two. French statesman Jean-Pierre Chevenement compares Mr Hollande’s acquiesce in this ruinous course with Pierre Laval’s deflation decrees in 1935 under the Gold Standard, the last time a French leader thought he had to bleed his country dry in defence of a fixed-exchange peg. It is the brutal truth.
The French socialists thought they had nothing to fear from the rise of the Front National, the one party prepared to tap into the welling fury of La France Profonde, pledging to restore French sovereign control over all that matters in the nation, and ditch the euro as the first order of duty. They thought the Front would peel off votes from the Gaullistes and split the Right. It is ripping into their own working class strongholds with near equal force.
They underestimated Marine Le Pen, now leading the Euro polls at 24pc. The socialists have slipped to third place. She has outflanked them with her brand of « Left Le Penisme » – or the Left-leaning side of Charles de Gaulle, as she once old me – a tooth and claw defence of the welfare state and the sacred Modèle Français. They have no answer to her attacks on « senseless austerity » and the « mad monetary policies of the ECB » that are hollowing out the industrial core of France, or to her taunt that the EMU project has become coterminous with mass unemployment, because they are all true.
It hard to pin down how much of Le Pen’s rise has to do with immigration, or the Kulturkampf against Islam, but she would never have gained such a footing – and nor would others, even UKIP in Britain – if six years of job wastage had not so not completely demolished EMU claims to competence and moral authority. « It all began with the euro crisis, » said Herman Van Rompuy, the EU president.
For some it began earlier with the « Stolen Referendum », the fateful decision to ram through the Lisbon Treaty without a vote after the French people had already rejected an almost identical text called the European Constitution. « In choosing to ignore the people’s choice in May 2005, France’s leaders revealed everything about the Europe we have. What we are seeing to today are the aftershocks of this anti-democratic earthquake, » said French author Coralie Delaume in Europe: Disunited States.
The Socialists said it was an outrage to refuse a referendum on Lisbon. Yet when the time came to vote in parliament, 142 deputies and senators abstained, and 30 voted for the Treaty. They gave president Nicolas Sarkozy his three-fifths majority, and it was much the same squalid story in the Dutch Tweede Kamer.
The elites thought they got away with their Lisbon legerdemain. They did not.»