In sunnier times, they used to talk about the “Franco-German engine,” the economic and political motor at the heart of the European project. Today, at least as far as Europe’s economy is concerned, the engine is spluttering. As Philippe Legrain argues in his piece in the new issue of Prospect, “das Modell Deutschland” is looking rather threadbare. Between April and June this year, the German economy posted negative growth of -0.2 per cent (whereas the figure for the second quarter of 2014 in the eurozone as a whole was 0.3 per cent). There was no room for schadenfreude outre-Rhin, however. France’s economic performance in the same period was barely less anaemic. For the second quarter running, French GDP remained unchanged, while private investment fell and unemployment stayed stubbornly high (in June, 10.2 per cent of the working population were unemployed).
This week, as the country digested the evidence of stagnation, French president François Hollande gave a substantial interview to Le Monde. The discussion ranged widely, covering foreign as well as domestic policy (notably European relations with Russia and the President’s enthusiasm for France’s traditional post-colonial role as “policeman” in West Africa and the Sahel), but it was what Hollande said about economic strategy that really caught the eye.
First, though, some additional context. Hollande’s personal opinion poll ratings are historically bad (worse, even, than those Jacques Chirac recorded at the height of a nationwide public sector strike in December 1995, and worse than his fellow Socialist François Mitterand ever managed over the course of two seven-year terms—French presidents now serve five-year terms, so Hollande has a little under three years to turn things round). In a poll published in Le Monde in July, only 24 per cent expressed a favourable opinion of the president, and 71 per cent said they thought France would be worse off at the end of his term than it was at the beginning. The economic “responsibility pact” between government, unions and employers, which Hollande announced with great fanfare at the start of the year, together with a range of “supply-side” reforms (the much-vaunted “politique de l’offre“), has not seduced voters, nor, if those growth numbers are anything to go by, has it begun to have any discernible effect.
Asked by Le Monde if it might not be time to reconsider this strategy, Hollande was defiant. “Tacking” or “zigzagging, he insisted, “would make our policy incomprehensible.” How then does the government intend to boost growth? By “accelerating,” the President said in his best Blair-circa-1998 accent, supply-side reforms designed to “modernise our economy by improving competitiveness”. To the extent that there are problems of demand, these are Europe-wide, Hollande argued, and the result of austerity policies pursued over several years. And anyway, “France suffers from problems of supply.”
Implacability is sometimes a virtue in politics. But, as the American academic Arthur Goldhammer, a close observer of the French scene and Thomas Piketty’s translator, has mordantly observed, “when a wall looms in the path of an onrushing vehicle, acceleration may not be the best strategy.”