The new French revolution

Austerity? Pssh.  That’s SOOO last year.  Haven’t you heard?  The latest Paris fashion is spending.

French voters have biffed sensible austerity shoes in favour of big-spending socialist stilettos.   (So have the Greeks.  But you’d have expected the Greeks to.)

For the French to do it feels like the grown-ups have gone to the sweetshop and spent all their money and stayed up all night on the sugar high. It’s just not what you expected of a politically astute grown-up nation.   Naughty, naughty French!

The cheek of the French in daring to ditch austerity in favour of spending is a fantastic Gallic two-fingered salute to the economic and political establishment.

They’ve dared to to reject the advice of the experts.  They’ve dared to reject the entreaties of German Chancellor Angela Merkel to get with the programme.

And they’ve cottoned on that austerity is just a posh word for punishing the poor.  Well the poor have finally spoken back.

But once the partying has subsided and the sense of schoolchildren taking over the classroom has ended, will they – and the rest of us – live to regret it?

I’d like to think that compassion and Keynes really are the way forward.  It seems to be working to some degree in the US.

But I fear that further digging in a debt hole this big just ain’t going to work.  There are some crises you just can’t spend your way out of and this is probably one of them.

Time will tell, but I think the French and Greek voters have delivered a game-changing vote.  Once a couple of nations have dared to say no to prevailing wisdom (and to Germany), this revolution could catch on across the continent.

In short, the French may have started a revolution that will reverberate across the Eurozone, the wider EU and the global economy too.

In the UK meanwhile, the Conservatives seem to be celebrating the anniversary of the birth of Charles Dickens by returning the country to some sort of Dickensian state. Like a Dickensian doctor, they are telling the poor they are punishing to keep taking the medicine.  The abolition of the 50p rate of income tax and the budget’s other bizarre provisions (the pasty tax and granny tax among others) have, I believe, done permanent damage to the claim that austerity is the only way forward.

Some people,  it turns out, are more austere than others.

Only yesterday, George Osborne was saying it was all a matter of presentation.  No George, it was the content, not the presentation that was the problem.  Even Conservative backbencher Nadine Dorries has accused the leadership of being posh boys who don’t know the price of a pint of milk.    Ouch.

Cameron and Osborne should be peering across the Channel through their binoculars this morning, watching what happens when leaders drift too far from the people they claim to service.

In France, the problem really was partly in the delivery, as well as in the concept.  Sarkozy was perceived as arrogant, spendthrift – the bling president with the bling wife.  He hardly came across as one of the peuple.

The genius of Francois Hollande was to be so boring as to appear completely ordinary, to be able to sell himself as a man of the people, someone impacted by the crisis as much as someone with all the answers.  Contrast his plans for a 75% rate of income tax for the richest with the UK’s abolition of 50%.

So the new French revolution has set the continent on an uncertain path.  Is this the beginning of the end of austerity? The renegotiation of hard-won EU stability pacts will come at a price, and not just for France and Germany.  The break-up of the cosy Sarkozy-Merkel team is likely to freak the markets out. Greece now faces months of political wrangling, paralysis and economic woe, as everyone jostles for position in the fragmented new parliament.

And if I was the euro, I’d be out buying a parachute right now.

Let’s hope the revolutionaries are right: that there really is another way, and that Keynes has something to offer. I hope so; I fear not.

2 thoughts on “The new French revolution

  1. Austerity! I’m sick of it, I’m sick of the word! These will be forever known as the ‘Austerity Years’ or ‘The Great Austerity’. We’re getting pounded by it and there is so much more to come. The ‘Fiscal Uprising’ is on the way!

    1. Agreed – and yes things could indeed get a lot worse before they get better. The worst-case scenarios are very bad indeed, and best-case ones aren’t that great either…

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