The crisis in France marks the beginning of what promises to be a protracted battle over the future of western Europe's welfare systems
A re-run of May 1968 it is not. Despite the superficial similarities – an unpopular right-wing government, students and workers on the streets of Paris, the riot police wading in with truncheons and tear-gas – the current crisis in France is not a case of history repeating itself.
May 1968 was a revolt against the
tedium and powerlessness of life in a bureaucratic welfare-capitalist consumer
society in which steady growth and full employment were taken for granted.
December 1995 is a revolt against a government's plans to remove substantial
parts of the welfare safety net from a society that has long seen steady growth
and full employment as things of the past.
But if that makes the current crisis
rather less exciting for left- wingers brought up on 1968’s dreams of a self-managed
socialist revolution, it is in many ways just as profound. The level of public
spending on welfare in west European societies is the single biggest issue
those societies face today, and the events of the past fortnight have brought
it into sharp relief. The government of Prime Minister Alain Juppe says that
France must reduce its generous welfare provision if it is to compete in the
modern global economy: there is no alternative to the rigours of the
marketplace. The unions say that they have paid for their benefits through
taxation and don't want to give them up. As NSS
goes to press, the chances of compromise seem remote.
What gives the crisis its
particular edge is that the government has been hoist with its own petard – or
rather one it was happy to inherit from the previous socialist administration.
For all Juppe's talk, international competitiveness isn't all that his
austerity programme is about: he wants to cut welfare spending because, according
to the Maastricht treaty, he needs to reduce the public debt if France is to
participate in European monetary union.
But the reason that the public
debt is so great is that growth is so low and unemployment so high – and the most
important reason for this is that the franc has been overvalued as a result of
a policy of pegging its value to that of the Deutschmark, the purpose of which
is of course to ensure that France is able to participate in European monetary
union in 1999.
The stakes are thus extremely
high. If Juppe gives in to the strikers and demonstrators and withdraws his austerity
programme, his political career will be over and President Jacques Chirac's
room for manoeuvre in his remaining six years in the Elysee palace will be
severely constrained. More important, if the Juppe plan is killed off, France
will be unable to meet the Maastricht treaty criteria on public debt until well
into the next century – and the money markets will almost certainly force a devaluation
of the franc into the bargain. Given that the Germans don't see any point in
EMU unless France is involved – they only agreed to it because Francois Mitterrand
insisted on it as the price for political union – that would almost certainly
destroy the prospects for EMU before the millennium.
It is not necessary to be a
Eurosceptic to consider that this might not be quite the disaster that some
commentators think it would be. The timetable for monetary union envisaged in
the Maastricht treaty was always ambitious, and the treaty always involved
serious pain for all the larger economies locked into it apart from Germany.
Many on the left who backed
Maastricht in 1992, including NSS, argued that the deflationary effects of the
process envisaged by the treaty – caused by budget deficit cutting and over-valued
currencies – necessitated serious compensatory measures organised through the EU
if it was not all to end in tears. But, thanks largely to the most Eurosceptic
government of all, our own, the best chance of such measures, the Euro-Keynesianism
outlined by Jacques Delors as president of the European Commission, was
scuppered last year. Since then, even the Europhile left has started to have
doubts about the conditions and timetable laid down by Maastricht. A victory
for the strikers and demonstrators would, at the very least, force a welcome
rethink about how we secure monetary union.
What it would not do, however, is
end the argument about how much western Europe can afford to spend the welfare
state if it is to compete internationally. Like the French strikers, NSS has always been sceptical of the idea
that a welfare state largely funded through income and consumer taxation is
such a disincentive to investment that it must be constantly pared back. We
can spend, in short, if we tax. But defending this view is likely to get
increasingly difficult in years to come. The French crisis is just the
beginning of a protracted struggle over the very nature of the society in which
we live.
