ON Monday the French government effectively collapsed as a direct result of a massive split in the leading ranks of the ruling Socialist Party over the huge crisis in the French economy, itself a reflection of the crisis that is gripping every one of the eurozone countries.
The stark economic fact is that along with virtually every other country in the eurozone, including the economic ‘powerhouse’ Germany, French capitalism is dead in the water.
The French economy has recorded a zero rate of growth in the past six months, while unemployment continues to rise to record levels.
All the economic targets set by the French socialist president, Francois Hollande, and his government, for reducing the country’s deficit have been abandoned, putting France on a collision course with the strict rules imposed by the European Central Bank on deficit reduction.
Hollande was elected as president just two years ago on a manifesto which pledged to solve France’s economic crisis by taming the banks, taxing the rich industrialists, creating hundreds of thousands of jobs through government subsidies and broadly rejecting the imposition of austerity on the French working class.
Two years later Hollande and his prime minister, Manuel Valls, have dropped any pretence of being anti-austerity and have launched their so-called ‘Responsibility Pact’.
This pact offers huge tax breaks to business to the tune of 40 billion euros (£32 billion) in exchange for a promise by these businesses that they will create 500,000 jobs over the next three years.
These tax cuts to the rich will be paid for by the working class in the form of 50 billion euros cuts in government spending. The declaration of this pact and a vicious austerity onslaught against French workers, is the immediate cause of the split at the top of the French government, with the economy minister Arnaud Montebourg launching a scathing attack on Hollande and his own government’s economic policy over the weekend.
This speech caused Hollande to demand that Valls immediately dissolve the government and reconstitute it by Tuesday purged of any minister who disagreed with the pact.
Montebourg had demanded that the French government abandon the ‘forced march’ of public spending cuts being imposed on all the eurozone countries, an imposition he directly blamed on Germany.
He called on Hollande to repudiate the ‘Kafkaesque’ dogma of austerity. The education minister, Benoit Hamon, joined the rebellion while making it clear that he and Montebourg both supported the tax cuts to business.
What they are in fact scared of, is the dangers of driving through massive cuts to social spending, and the inevitable rise in unemployment resulting from such draconian measures, and the inevitable confrontation that this will lead to with the working class and especially the youth who have born the brunt of unemployment.
This fear of a revolutionary upsurge in France and across Europe, as workers refuse to accept that they must pay for the crisis of capitalism, lies at the heart of this split that has brought down the government.
But they themselves have no answer to the crisis except to call for the ECB to embark on a Quantitative Easing (QE) programme, printing billions of worthless euros to be handed over to the banks in the vain hope that this will somehow ‘kick-start’ the bankrupt capitalist economies of Europe.
All QE will do – as it is doing already throughout the world – will be to provide the fuel for the massive speculative binges by the banks that have led to unsustainable bubbles in the stock markets of the world. With no purely economic solution to the crisis that is gripping world capitalism, the splits within the bourgeois political parties can only intensify.
The collapse of the reformist government in France is just the beginning. The class struggle is set to intensify as the working class is forced to recognise that reformism can offer no solution to the crisis and that its future can only be secured through the socialist united states of Europe and the victory of the world socialist revolution.