The main candidates for the presidential election primary in the conservative opposition Les Républicains party, to be held in November, have now all outlined their economic programmes, and it is clear that if one of them is elected to the presidency in 2017, France is in for a harsh neo-liberal cure.
Former prime ministers Alain Juppé and François Fillon, former president Nicolas Sarkozy – who has not yet officially announced his candidacy – and youthful challenger Bruno Le Maire all focus on cutting public spending and advocate a frontal attack on labour law and social protection.
Fillon led the way in this race towards a great unravelling of the French social model, and the others followed. “They are all saying roughly the same thing,” socialist President François Hollande said in an interview with Europe 1 radio last month, doubtless pleased that their stance has given him a relatively free rein on the Left of the political spectrum.
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Of course, the unity on the Right is not that surprising. “The programmes are not identical but it would be strange if they were complete opposites,” commented a source from Le Maire's inner circle who asked not to be named. And Maël de Calan, Juppé's economic advisor, added: “That underlines that there is no fundamental disagreement on the Right on the remedies to apply.”
These prospective presidential candidates appear unfazed by the present government's difficulties over the past few months in trying to bring in a bill of new labour law reforms known as the El Khomri law, named after employment minister Myriam El Khomri, who is shepherding it through Parliament, backed by Prime Minister Manuel Valls and President Hollande. The law is the socialist government's attempt to open up the stagnant French labour market with much milder measures than those which the Right's prospective candidates are proposing. Yet, since March, it has prompted the broadest and most bitter labour unrest since 1995.
This uncompromising neo-liberal direction of the conservatives, while unsurprising, consolidates a break with the French Right's historical positions. Charles de Gaulle, the Right's ‘spiritual father’, instigated the French welfare state, and the Gaullist Right has always had a penchant for social measures and cohesion.
The prospective candidates for 2017, though, aim to cut public spending by between 85 billion and 110 billion euros over the five years to 2022. Each offers an identical solution, essentially consisting of reducing the number of public employees, ending the 35-hour legal working week, delaying the retirement age and making unemployment benefits diminish over time. Social security charges for companies in the private sector would be cut to stimulate job creation.
Even if the menu is roughly the same, each candidate has his own style for making the pill easier to swallow. Le Maire's advisors refuse to use the word 'liberalism' but speak of “renewal” and a “more open policy” without a “purge”. Yet Le Maire wants to abolish the most local level of France’s three-tier local government1, and in the next two levels up, merge the councils in the départements (counties) and regions. The result of his plan would be the loss of a million public sector jobs in ten years.
The only other presidential hopeful who is prepared to go that far is Fillon. He wants to cut 600,000 public sector jobs across the three main branches of public adminstration in France; the national civil service, local government and state hospitals. Juppé and Sarkozy appear moderate in comparison, talking of 250,000 to 300,000 fewer public sector jobs over the five years of the next presidency.
Juppé, stigmatised as being too far to the left by his rivals, refuses to join in presenting a catalogue of shock measures. But his programme is hardly less drastic than the others. His advisor Maël de Calan says that what separates him from the other conservative candidates is “his credibility, the fact of not being a hardliner on every subject”.
His proposals include pushing back the retirement age to 65, and abolishing the wealth tax and the 35-hour week. He promises tax breaks worth 30 billion euros, of which 20 billion would go to companies. This is not all that different from the “fiscal counter-shock” of 20-30 billion euros promised by Sarkozy. Fillon goes even further, recommending cutting corporate social security charges by 50 billion euros.
Fillon told Europe 1 radio last month that Juppé's programme is just a watered-down version of his own. In his book Faire published last September, he set the tone, opting for a radical strategy of implementing as many reforms as possible before October 30th 2017 – the next president will be elected in May 2017 – with a more contained government. To achieve full employment, “the key is to carry out the necessary reforms on all fronts at the same time,” he told financial daily Les Echos last month.
The Juppé camp has the same strategy, talking of tackling everything at the same time and passing a dozen decrees in the first six months of a new government. In Le Maire’s camp there is also talk of a series of decrees before September 2017.
Given the high level of tension surrounding the socialists' attempt to reform labour law, such measures carry the risk of complicating things much further. “The Right thinks it can forge a new alliance against the public sector and the beneficiaries of welfare services using the bosses and private sector workers […] and by taking advantage of the loss of influence of the Left and trades unions,” said Henri Sterdyniak, economist at the Observatoire Français des Conjunctures Économiques (French Economic Observatory) and a member of Économistes Atterrés, a group of economists who advocate alternative policies to those of the liberal establishment.
Sterdyniak says that should the Républicains win next year's elections, trades unions would face a decline in their influence, because agreements would be negotiated directly between employees and employers in each company, as opposed to the current negotiations industrial sector-by-sector between union-management representatives. “If the Right comes to power, the first thing it will bring in is an upgraded El Khomri [labour] law, the boss will not need trade unions to forge agreements. They will be left with the freedom to write employment contracts with specific rules for redundancies, which is the main demand from the employers,” he says. There would be a trend towards “a direct dialogue with employees, which very quickly becomes an individual dialogue”.
At the end of the day, the middle and lower classes are likely to be the main losers. The only promise for them is work, but in the form of insecure jobs, which are allegedly the pre-condition for getting back to full employment. Even so, Calan, Juppé's advisor, says the aim is not to “break” the French model. “We want it to be above the waterline. Our labour policy is, 'jobs first',” he said. Fillon recently commented: “People say the jobs in Germany and Britain are insecure […] We have the insecurity but not the jobs.”
Nor would there be any rise in purchasing power under these manifestos. Fillon and Juppé even want to increase VAT, now at 20%. The end of the 35-hour week could also lead to a fall in salaries for those who work overtime. As for minimum benefits, they would be capped to below the minimum wage2, while employment benefits would become degressive after 12 months. Juppé also proposes freezing social benefits for five years and cutting housing benefits.
There would be no real compensation from the 10% reduction in income tax promised by Sarkozy. He claims this would “benefit all taxpayers for taxes paid in 2018, or 7 billion euros returned to French people”. But half of French households do not pay income tax – the poorest half – and so would never benefit from this measure.
Given the current labour unrest, these proposals risk prompting an far greater social crisis. “If the government gets in and immediately takes very drastic measures like immediately pushing back the retirement age, degressive unemployment benefits, a hiring freeze for the public sector and an upgraded El Khomri law, that would pave the way for a violent conflict,” Sterdyniak said. “But if it were a little bit clever, it would first attack labour protection before social protection, because you mustn’t have everybody out on the street.”
Nevertheless, the favourites in the Républicains camp are sure they could convince the public of the need for their policies. “Alain Juppé is not obsessed with being popular, we are not promising the moon, we are not promising that everyone in France will have a CDI [permanent job contract] at 4,000 euros a month,” said Juppé advisor Calan, adding that the aim would be to create at least a million jobs over the five-year presidency. A person close to Le Maire said: “Listening, respecting, being exemplary, that is the method. People can accept [things] if we keep our word.”
Fillon addresses this problem in detail: “For such fundamental reforms it is necessary to have the support of a clear democratic contract […] I am preparing a very detailed [manifesto] project so that there can be no ambiguity.” He believes that “more and more French people want more flexibility and freedom to act”.
One thing is sure. Neither the lower classes nor public sector workers will be very heavily represented in Les Républicains' primary in November.
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1: France has three tiers of local government: regions, départements and communes (see more here). President Hollande has tried to reform this by reducing the duplication of functions.
2: The French minimum wage (SMIC) for adults currently stands at 9.67 euros/hour gross, or 7.51 euros/hour net, equivalent to 1,466.62 euros gross per month, or 1,139,21 euros net, for a 35-hour week (see more, in French, here).
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- The French version of this article can be found here.
English version by Sue Landau
(Editing by Graham Tearse)