Sunday, November 17, 2013


After my return from a trip to the United States, France looks more than ever at a standstill. In a mere three weeks things have considerably worsened here, with factory closings, workers revolt, tax increases, government U-turns, continued high unemployment, a downgrade to AA by ratings agency Standard & Poor's (*), and an unpopular president Hollande who seems to have no solutions and less and less support. In fact, his approval rating has dropped to an unprecedented 21% and there are signs that even within his own administration there is growing disagreement with the course he has set.

President Hollande on Armistice Day
On Armistice Day, November 11, which marks the end of World War I, President François Hollande was loudly booed as he laid a wreath on the Tomb of the Unknown Soldier under the Arc de Triomphe in Paris, du jamais vu on a solemn occasion like this. Seventy people were arrested and politicians were quick to express their shock at the chosen place and time for this attack by what they considered a fringe element. But the fact remains that the incident was widely reported on television and in the press, further damaging the president's image. The booing was accompanied by cries for his resignation, and Socialist Deputy Malek Boutih called for the immediate replacement of Prime Minister Jean-Marc Ayrault, who is as uninspiring and unpopular as his boss. "We need a strong signal," says Boutih, "and a government shake-up would be a start."

Strikes and protests are par for the course in France, but this time a line has been crossed. Already perceived as weak and indecisive and lacking in leadership, the president seems to be caught in a downward spiral that only a drastic change of course can stop.

In order to reduce its budget deficit and stimulate growth, France has to implement major structural reforms (taxation, labor market, pensions), but thus far Hollande's efforts in these areas have been tentative and ineffective, and nothing indicates that he is ready to change tack. His refusal to touch the costly French social model a 35-hour workweek, retirement at 62, universal healthcare, minimum hourly wage of €9.40 ($12.50), generous family allowances is unrealistic and counterproductive, according to most economists. His reliance on tax increases instead, and his inability to bring down unemployment, have provoked a profound malaise and a loss of confidence that threatens to harden as year-end approaches and the promise of reduced unemployment by 2014 remains unrealized, like many of his other campaign promises. Meanwhile, he asks for more time and keeps tinkering in the margin.

Bonnets Rouges in Brittany
Brittany, a socialist stronghold and major pork and poultry producer, became the latest trouble spot after several factory closings there. Farmers, fishermen and food industry workers joined together to protest against the new Eco-tax on heavy trucks, created by Nicolas Sarkozy with effect on January 1st 2014. The protesters, wearing red woolen caps (bonnets rouges), have become a symbol of revolt and are widely supported.

In response, the government has temporarily suspended the eco-tax, as it has done with various other taxes (an ill-conceived tax on savings, and several business taxes), but held firm on its 75% tax on earnings over €1 million for footballers, to be paid by their clubs. [Last year's decision to tax rich individuals at 75% on earnings over €1 million was ruled unconstitutional.]

Leonarda Dibrani
Another government flip-flop concerned the recent expulsion of a 15-year old Roma girl from Kosovo whose family resided in France illegally. According to Interior Minister Manuel Valls, this expulsion followed the established rules and was justified because "Romas do not integrate well". If many agreed with the rules, few approved of the method applied since the girl was taken off a school bus by police while on a field trip with her classmates. The outraged classmates organized protests and demanded the return of Leonarda. Mr. Hollande, overruling Mr. Valls, thereupon announced on television that the girl was allowed to come back to finish school but without her family, which Leonarda then refused. [Mr. Valls has since said that the girl's father had been expelled because of his criminal record, including beatings of his wife and six children. And Education Minister Vincent Peillon has announced that no more children will be deported during school time.]

This bumbling performance by an incoherent government could not help but reinforce the amateurish, trial-and-error, aspect of an administration that seems to lack a single voice and a firm hand at the helm.

France is divided into 101 départements, each headed by a Prefect as the highest representative of the State. These Prefects render a monthly report to the Ministry of the Interior. In the report of October 25, they express their alarm at the spreading mood of anger and despondency in France. Continuing factory closings and repeated new taxation have brought the people to the point of exasperation and unified them into defiance and revolt. A dangerous mood of pessimism hangs over the country, according to the Prefects, and social unrest is growing. "We need to be alert to a real possibility of explosion. If nothing is done this could boil over into open revolt."    

The bonnets rouges uprising has resulted in the destruction of numerous roadside radars and eco-tax equipment in Brittany and has spread to 23 departments already. Hence the request by the Prefects to take down the offending eco-tax installations in their area before they are destroyed by protesters.

Hollande as Louis XVI
So what are the president's options? Replacing his lackluster Prime Minister with one of two popular candidates, current Minister of the Interior Manuel Valls or former Secretary of the Socialist Party Martine Aubry, might calm the waters for a while. A suggested Cabinet reshuffle, on the other hand, might be risky in view of the municipal elections coming up next spring when socialists could suffer the wrath of disappointed Hollande voters. At the very least, he should do a better job of explaining his strategy and communicating more effectively and more frequently with the voters.

The man who wanted to be a "normal" president has lost touch with the people. Isolated in his golden cage at the Elysee Palace and seemingly deaf to the growing clamor outside, he is increasingly being compared to hapless King Louis XVI same indecisiveness and eternal search for consensus, same inability to read the mood of the citizens, similar problems of empty state coffers and need for reforms. Let's hope that history will not repeat itself and that by some miracle Hollande finds a way out. It's obvious: "normal" is not good enough.

(*) In a November 8 NY Times op-ed article, American economist and Nobel prize winner Paul Krugman writes that the S&P downgrade is directed more against Hollande's ideology than against France's state of the economy which he considers healthy.