The Austerity Blues – French Edition

François Hollande. Photo by Jean-Marc Ayrault - Flickr:  Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons

François Hollande. Photo by Jean-Marc Ayrault – Flickr: Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons

Today in the United States media, the stories that sucked up all the oxygen involved either Ferguson or the Islamic State. While both of these stories are newsworthy and deserve to be covered, there’s a lot of other things happening that affect us all that get overlooked by the media in their rush to cover the splashy story. And, when one of these overlooked stories involve Europe’s second biggest economy, it worries us.

Yesterday, France’s Prime Minister Manuel Valls presented his government’s resignation to President François Hollande, after the economy minister, Arnaud Montebourg, had called for an end to the austerity policies imposed by Germany. In an interview Montebourg had given to Le Monde on Saturday, he said;

“The priority must be exiting the crisis, and the dogmatic reduction of deficits should come after,”  insisting that the austerity policies had gone too far. He went on to criticize Angela Merkel, the German chancellor. “Germany is caught in a trap of austerity that it is imposing across Europe.”

He then spoke at a Socialist party rally on Sunday, saying: “”France is a free country which shouldn’t be aligning itself with the obsessions of the German right,” and urging a “just and sane resistance.”

In what should sound familiar to all of us, the austerity policies implemented by the French government has led to very slow economic growth. President Hollande said in an interview in Le Monde last week that France will no longer try to meet a deficit reduction target this year, and may fall behind on deficit reduction next year as he wants to put in place 50 billion euros worth of spending cuts he has already pledged to make through 2017.

However, Valis will be in charge of putting together the new government. And. he’s pledged to stick to a cut deficits/lower business taxes path; one that doesn’t sit well with the more left-leaning of the majority Socialist party. And, on the right, the National Front, an ultra-conservative nationalist party, is making inroads on the center-right UMP. The parallels to politics here in the U.S. are fairly evident, we think.

The new government’s supposed to be named today. The real question is whether Valis can form a new government that meets the national assembly’s approval. Constitutional expert Dominique Rousseau told Libération that “”We can’t rule out the government being thrown out by a majority in parliament, and the president would have to envisage a dissolution of the assembly. The crisis is not over, it’s just beginning.”

Occupy World Writes calls for the end of the austerity programs going on both here and abroad. If nothing else, the last five years have taught us all that you can’t make serious budget cuts and reduce the tax base revenue and at the same time still expect to see a substantial recovery.






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