The first obstacle that François Hollande will face is the hypocrisy of some of his fellow heads of government at the European Councils and summits. His victory at the polls in France has agitated and unsettled most European governments. For the first time, someone actually dares to challenge Germany’s uncontested hegemony.
The French, and indeed the whole of Europe, are gradually coming to terms with the fact that the social democrat (or if you like, the democratic socialist) Monsieur François Hollande is the new president of the French Republic. It´s normal that as soon as his victory at the polls was announced, his agenda gets filled up very rapidly with people urgently wanting to meet with him and to give him advice on what to and not to do. Most of the advice he is given will sound genuine and plausible, even though a number of them would be contradictory, while some others will simply be unrealistic.
What exactly are the pieces of advice that Mr. Hollande should be taking seriously at this moment? What should his main considerations – realistically (forget about the election manifestos for one moment) be? What are the key issues that he should take into account? What are the strength and weaknesses of his current starting position? Above all, what are the key obstacles that he needs to overcome? Well, for a start, here are three of the obstacles.
Before he won the elections Mr. Hollande promised he would review the fiscal compact. According to him, austerity should not be allowed to become a death penalty for most Europeans. He is certainly right. Austerity has worsened the crisis all around Europe. It has caused a second dip into recession and has increased poverty, social exclusion pain and suffering. If he cannot convince other European leaders to act reasonably, he can at least, decide that his country will not follow them along this suicidal road. However, there are high risks that the obstacles ahead will force him to give in shortly after coming into office. The hopes of millions will then become just another promise broken by politicians.
The first obstacle that François Hollande will face is the hypocrisy of some of his fellow heads of government at the European Councils and summits. His victory at the polls in France has agitated and unsettled most European governments. For the first time, someone actually dares to challenge Germany’s uncontested hegemony. The prevailing dominance of ultra-liberal views has been questioned. For the first time, someone in Europe questions these policies, someone dares to ask openly what the purpose of sticking to some policy that has failed to deliver the results expected is. Italy, Greece, Ireland, Portugal and Spain have found an ally who is not a PIIGS himself. It is a country that just calls for a break, for some time for thinking, for evaluating if how we have chosen to fight this crisis is not just making things worse for all of Europe.
In public, leaders of the troubled countries would speak loudly of their adherence to the imposed austerity packages. That is being politically correct, and not appearing to be breaking ranks. In private they would confess to how glad they are that it was Hollande and not Sarkozy who had won the elections. The question is, will they support him in his fight to change how the German Chancellor views the way out of the crisis? Who among them will be bold enough to break ranks? Most of them would prefer that it will indeed be some other country that first backs France. The risk is, if none of them takes the first step, France might find herself alone and consequently lose this fight.
Some countries, even while wishing France success with all their hearts, might think that this is the right occasion to demonstrate their solidarity by showing off how firmly convinced they are of the appropriateness of this austerity wave. Paradoxically, it is very likely that the stronger ally he will find will be a conservative. David Cameron, the UK Prime Minister, has been the first politician in Europe, bold enough to look at Merkozy in the eyes and say no in front of the throne.
The second obstacle is the German chancellor. Mrs. Angela Merkel, has spoken loudly about the possibility of changing the fiscal compact: “it is a signed compromise and we will, by no means, change it”. She intentionally forgets that this treaty has been imposed and set in stone in most European constitutions without listening to what the citizens of the affected countries had to say. A leader with more democratic maturity would have taken into account that changes in a Constitution cannot be made without wide consensus. Constitutions need stability and cannot change back and forth following conjunctural majorities. A true democratic leader will not impose his or her vision on the governments that will be elected in ten or fifteen years from now. Rather, he or she will respect the political options that the fellow citizens will choose in due time. These have been age-old unwritten rules that no other politician had dared to break. The German chancellor can therefore not call for respect for written agreements reached in such a non-conforming manner.
The third obstacle will be the European Central Bank. There can be little changes in fiscal policy if monetary policy does not change. If the ECB does not follow the Fed’s pragmatic views, tensions in the financial markets will make any departure from austerity principles impossible. Even though Draghi is more pragmatic than Trichet his predecessor, he will only change the ECB´s policy under strong political pressure. He is independent, that is, unaccountable. No one can force him to change the way he does things no matter what. He only responds before God and history; and it will be a very long time before anyone of these two speaks.
To conclude, Monsieur Hollande has a difficult task ahead – a formidable one: But many Europeans are hoping that he will succeed where several others leaders have failed.
The author of this article, José Antonio Poncela, is a member of the Editorial Board of Read-Online.Org. He was a former General Director of Budgets, Economic Planning and European Funds at the Government of Castilla-La Mancha. He is a researcher at CEET and a lecturer of Macroeconomics at the University Carlos III. (Contact: Jose-Antonio.Poncela@Read-Online.org )
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