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Europe may just be living a remix of the late 2008 moment when Barack Obama won the presidency in the United States. But this time, will it be real?
The election on Sunday of socialist Francois Hollande as president of France comes at an extraordinary historical junction. He may have risen to the occasion himself, stressing in his acceptance speech “austerity is not a fatality.” This is not only about France – it’s about the future of Europe. And when France talks – better yet, acts – Europe listens.
What a party that was in Bastille on Sunday night – capable of sending chills to any spine. A cross-section of French society sending a message to Europe and the wider world; it’s possible to dream of change – and most of all, social justice. There is an alternative.
And all that with a Quiet Frenchman as the lightning rod. A “normal” guy. Not bad for what was the socialists’ replacement choice – after former uber-favorite, then International Monetary Fund (IMF) director Dominique Strauss-Kahn, fell for that extremely dodgy sex trap at the Sofitel in New York.
But now it’s hangover time. The Left runs only seven among 27 European Union (EU) nations. The bling bling King Sarko, neo-Napoleonic Liberator of Libya former president Nicolas Sarkozy, has been reduced to a minor historical footnote – with his popstar Italian belle wife Carla Bruni already plotting her next career move. King Sarko is the 11th European leader to fall over the double-dip European recession. “Merkozy” – King Sarko and German chancellor Angela Merkel, the mongrel couple running Europe, is dead.
Slouching towards Merkollande
Frau Merkel and Britain’s Prime Minister David Cameron were and remain all for “austerity.” Iron Lady Angela badly wanted King Sarko to remain in place. Yet Hollande sent special envoys to Berlin last week. As a pragmatist, he knew that Merkel had seen first hand how Sarko could also be arrogant and unpredictable.
Hollande is a self-effacing, down to earth pragmatist fond of consensus who happens to be an economist who once taught at the elite Sciences Po in Paris. He’s no radical. “Merkollande” will have to be born out of pragmatism. The really tough nut to crack will be German Finance Minister Wolfgang Schaueuble – the Wotan of Austerity in the eurozone.
Merkel and Schaueuble would need to be hacked to death by a gang of Visigoths to let go of their fiscal pact – to which King Sarko subscribed. Mario Draghi – former Goldman Sachs hand and president of the European Central Bank (ECB) – wants a growth pact as well. He – and the neo-liberal elite – see it as even freer markets, that is, a hire-and-fire free for all, perhaps coupled with more public investment in infrastructure.
Hollande is totally against the uncontrolled, unregulated mega-free market. As for public investment, the only nations who could pull it off need good credit rating and low financial costs. Virtually none in the EU now qualify.
So it would be up to Germany. The capital would have to be German. We should expect Hollande to convince Merkel that sooner or later Germans will notice that never-ending recession is politically toxic. The foremost ominous consequence already exists – for all to see; the extreme right wing on steroids all across Europe.
During his campaign, Hollande went no holds barred to identify who the “enemy” is; it’s “the world of finance.” No wonder Wall Street and the City of London saw – and will continue to see – Hollande as more dangerous than Vladimir Lenin. So the battlefield is drawn; Hollande versus neo-liberalism and “the markets,” Hollande as Don Quixote versus the iron troika of the ECB, the IMF and the European Commission (EC).
Epic doesn’t even begin to describe it. Once again; let’s follow the money (as in disappearing euros).
Public debt in France is 90% of gross domestic product (GDP). There have been no balanced budgets since 1974. The ratio of government debt to GDP is almost 57% – the highest among the 17 eurozone nations. Unemployment is at roughly 10%. Virtually an entire generation of children of migrants – mostly from Northern Africa – have been confined to ghettos, sullen and unemployed, all their lives.
Hollande wants to change France’s retirement age from 62 back to 60. He wants to hire at least 60,000 new teachers. He wants to reduce electricity prices for low-income people. The only way to finance all this would be his (promised) 75% tax rate on anyone earning over 1 million euros (US$1.3 million) a year, plus a tax on financial transactions. No wonder la grande bourgeoisie in France is tearing their Diors in despair.
So that’s Hollande’s platform in a nutshell; jobs and economic growth. If he fails, the extreme-right wins, blaming both Paris and Islam.
Show me the money
Under Hollande, the grand lines of King Sarko’s foreign policy may hold – but they will be substantially tweaked.
Hollande has never been to China. In Beijing, they are inclined to see him as a “normal president” – unlike the Duracell bunny on crack King Sarko. Thus, from a Chinese point of view, relations are bound to be “normal,” as in “stable.”
Crucially, Hollande wants a deeper strategic partnership with the BRICS – Brazil, Russia, India, China and South Africa. And especially savory to the emerging powerhouses, he is in favor of the end of the US dollar as the world’s reserve currency – to be replaced by a basket of currencies. Now the BRICS may have a strategic ally right at the heart of the EU in terms of trying to modernize the global financial system.
Hollande’s first international test is right ahead, at the North Atlantic Treaty Organization (NATO) summit in Chicago later this month. It will be fascinating to watch whether he may be able to throw a monkey wrench into NATO’s Globocop ambitions. Most European countries, fed up with the black-hole adventures in Afghanistan and Libya, may in fact support him. Hollande said he would withdraw all French soldiers from Afghanistan by the end of 2012.
But the real war will be inside Europe. In the end, we’re back to “follow the money.”
Hollande wants France’s ageing population to retire early. He wants France’s farmers comfortably subsidized – not to mention its cows, whose standard of living is better than 2 billion people on the planet. He wants the generous French social welfare apparatus to keep working.
How to pay for all this – when all the money has been sucked up into the bulging pockets of the 0.1%? The “normal” guy may not just be making a push to change Europe; he will have to make a push to change the world.