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France: presidential elections 1 « Previous | |Next »
April 24, 2012

The big news from the first round of French presidential vote is not François Hollande moving a step closer to becoming the first Socialist president of France in a generation by beating the incumbent, Nicolas Sarkozy. It is the Front National's Marine Le Pen's strong showing --18% of the vote.

This is a party that is openly xenophobic, and campaigned on an anti-immigrant, anti-Islam platform. It attracted the support of those opposed to immigrants who takes jobs and social benefits, Islam, globalisation, open borders, and the euro that drive jobs to faraway countries, with no apparent benefits for ordinary people. This is a rightwing cultural conservatism that is suffused with nostalgia for an always better and often imaginary national past – the era before mass immigration, globalisation, Europe, and international finance destroyed, they believe, the old, white, illiberal, homogeneous nation states of Europe.

More broadly there is a democratic reaction to the German-scripted programme of austerity and legally enshrined fiscal rigour that curbs the budgetary sovereignty of elected governments. This socialist François Hollande's central campaign pledge was to reopen Chancellor Angela Merkel's eurozone fiscal pact, an international treaty signed by 25 EU leaders and currently being ratified. The budget cuts are required by EU fiscal rules that mandate that eurozone countries run annual deficits no more than 3% of GDP, Hollande calls for a refocusing of the crisis-fighting strategy away from austerity alone to include measures to boost growth.

What is being challenged is the austerity decreed by Europe's leaders (Berlin and Brussels) as the answer to runaway debt, soaring deficits and a failing euro. Europe's forced austerity is pushing the continent into recession. Like Greece Spain is already in one, and much of the rest of Europe is on the way into an austerity trap of slower growth and higher unemployment. Since budget cuts depress the economy, to achieve a one percentage point of GDP reduction in the deficit requires cutting by more than one percentage point. And when one misses one's target, even more cuts are necessary.

In the Netherlands the center-right government of Mark Rutte fell, unable to cobble together a coalition to pass budget cuts required by EU fiscal rules. The political crisis was triggered by far-right leader Geert Wilders, who refused to support plans to make up to €16bn of cutbacks. The Rutte government has been hoist on its own petard, since it has been the loudest advocates of the most rigorous austerity for the bailed out countries of the eurozone and of the punitive new fiscal rules.

Paul Krugman says that Spain is the epicentre of the economic crisis:

Never mind talk of recession; Spain is in full-on depression, with the overall unemployment rate at 23.6 percent, comparable to America at the depths of the Great Depression, and the youth unemployment rate over 50 percent. This can’t go on — and the realization that it can’t go on is what is sending Spanish borrowing costs ever higher...Nonetheless, the prescription coming from Berlin and Frankfurt is .... even more fiscal austerity.

So Europe continues on its its present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment. Fiscal austerity is the response to any and all problems.

| Posted by Gary Sauer-Thompson at 11:56 AM | | Comments (2)


Marine Le Pen may have came in third place in the first round of the presidential elections but her voters now hold the election in the balance in next week's presidential election run-off between Socialist Francois Hollande and French president Nicolas Sarkozy.

Sarkosy is courting the far right this week with speeches about curbing immigration, protecting France's borders, values of work, family and love for the homeland. Without winning over a large number of Le Pen's 6.4 million voters, Sarkozy has no chance of re-election.

However, Sarkozy is not seen to be one of them, but the main representative of “globalised capitalism” in France; a president who has done nothing to slow down immigration. Many of them voted for Sarkozy in the first round of the 2007 election. They now feel betrayed and angry.

"So Europe continues on its its present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment. Fiscal austerity is the response to any and all problems."

Britain has clambered only half way out of the deep trough into which it fell in after the collapse of Lehman Brothers in September 2008, making recovery even slower than in the 1930s.

The Cameron Government has made the reduction of the budget deficit its economic strategy. They have no growth strategy. Cameron, Osborne and Clegg agreed objective was to wipe out the deficit in one parliament by sweeping spending cuts and to justify the move by pretending the British economy which had started to grow again was as precarious as Greece.

This determined all that followed.

Free-market thinktanks such as the Adam Smith Institute and the Institute for Economic Affairs say Osborne's problem is that he has not been aggressive enough in cutting spending. A much smaller state would provide the scope for cuts in personal and business taxes, thereby boosting economic growth.