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Gérard Duménil: Most voters want to save social programs and reject austerity

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington.

The United States is not the only country going through a presidential election. On April 22, France will begin the first round of its presidential elections.

And now joining us from New York City, where he’s visiting, is Gérard Duménil. He’s an economist and a former research director at the Centre National de la Recherche Scientifique. He’s written many books. His latest he co-authored is The Crisis of Neoliberalism. Thanks for joining us, Gerard.


JAY: And I should point out you’re normally based in Paris, but as I said, you’re now visiting in New York. So give us a picture of who’s running and how is the deepening economic crisis in Europe affecting the elections.

DUMÉNIL: So now in the French elections we have two—the most important candidates is the candidate of our present president, President Nicolas Sarkozy, who is the candidate of the right, main candidate of the right, and we have the other person, which is the candidate of the Socialist Party, which is a big, large, you know, party of the left in France, and his name is François Hollande. Okay? But now beside them you have two other important candidates. One is the candidate of some form of more radical left. His name is Mélenchon. And the other one is the candidate of the extreme right, Marine Le Pen. She’s a daughter of Le Pen, you know, who was the founder of this Front National, which means national front. Okay? So we have the two big candidates right and left that I mentioned first, and we have two other important candidates, which are, to the extreme right, Le Pen, a woman, and to the left, Mélenchon.

JAY: Let me ask you a question about the Socialist Party. In Greece and some of the other European countries, what are called socialist parties have been quite fully participating in the austerity measures and sort of buying into this whole policy, and a lot of the left of those countries don’t consider their socialist parties left. What’s this—what is the state of or positioning of that party in France?

DUMÉNIL: Usually I use the categories left and right in the traditional sense. They are classified to the right and to the left. Okay? But many people believe, of course, you know, that the Socialist Party is not really a left party. And that is one of the reason of the success of the more radical party, which is Front Gauche, gauche—the left front. Okay? And Mélenchon. Okay? So Mélenchon has a much more radical attitude that [than] the Socialist Party.

Socialist Party [incompr.] France, you know, in the recent decades, and beginning with Miterrand in ’81, of course. It’s not clear that their policy was really a policy from the viewpoint of a genuine left. You know. But, you know, still, they are different from the right, and on many social issue, political issues, they are still different, you know. And maybe for the economics they’re not going to do many things that they are really different from Nicolas Sarkozy, but there are other aspect, because in France now, you know, there’s a very central issue in the opinion, which is the issue of security, as we call it, you know, which is the problem of immigration, the problem of delinquency. You know. And this is a central political issue in France now. And our present president, Nicolas Sarkozy, tried to gain the votes of the extreme right, of Le Pen, you know, by flattering here opinion, you know, concerning this type of issue about immigrations, and many, even popular—among popular classes, like workers, you know, they really listen to this and to what Marine Le Pen is saying, you know, because they believe that they’re losing their job because of the presence of immigrants and there is a problem, you know, in France in this respect. So concerning basic economic issues, it’s not clear, you know, that really the Socialist Party could do anything very different from the right, Sarkozy, but on an issue like this one, and maybe social issues, they are certainly different to a large extent.

JAY: Right. Now, the Left Party that you’re saying is the next tier down, I understood that they were polling fairly well, ahead of Le Pen, and surprisingly, they—the people [incompr.]

DUMÉNIL: Not so much. You know, now what’s happening is that the two party—the two less important party, but still very important, in the polls they have about 15 percent. So now it’s difficult to tell which one will be the third one in the election, because both of them are about 15 percent. In the same situation, at least one week ago, the same was true of Hollande (Socialist Party) and Sarkozy (the UMP) because they were close to 27 percent each. Okay? But in the recent days—you know, I read it today on my computer, actually—it seemed that Sarkozy’s diminishing and Hollande is progressing. In the last few days, Sarkozy, apparently, you know, lost two percentage points and Hollande gained. So it’s very balanced. It’s very balanced. You have two big candidates about the same percentage, and the two more extreme, you know, candidates about the same percentage, too.

JAY: Now, the deepening economic crisis in the euro zone—and a lot of people have placed a lot of the blame, at least, not just on the big banks, but particularly on German banks and the German elite. And is there any sense that France might resist some of these policies if the Socialist Party is elected? Or even Sarkozy, I see reports even he’s talking about trying to save French social programs and such.

DUMÉNIL: Yeah, but, you know, if you look at the program, for example, it’s very interesting to see that both candidates say we have to control finance, okay, we have to limit big upper incomes, we have to increase the taxation of very high incomes. But, you know, you have to be very careful, because it’s not clear that you can take all that seriously. Okay? They are blaming the crisis on the banks, you see, but what are they really going to do? We have absolutely no idea. For example, Hollande has the kind of policy which will be some kind of Glass–Steagall Act, you know, separating the activities of banks, or they are in—also Socialist Party is in favor of the Tobin tax. But what they will do will probably be very different.

But you see the crisis has a very big impact on politics in France. It’s not so much a relationship to Germany, you know, but it’s mostly this type of effect. As I said earlier, worker losing their jobs, okay, right, of—you know, unemployment is more than 10 percent and the situation is not improving. And now several countries in Europe are entering into a new recession, okay, like Greece, like Spain, and very probably, you know, very likely the same thing will happen sooner or very soon in France, because of listening to the politics of austerity. They are just cutting expenses, cutting expenses. And so, well, we’re—so people are very concerned.

But this type of feeling, you know, because people are afraid for their job, to lose their job, you know—but this type of feeling can stimulate people to the right or can stimulate people to the extreme—to the left or to the extreme right. Okay? So the effect is politically very complex. For example, you know, Marine Le Pen from the extreme right, she has a very, very strong economic program with protectionism, you know, with the control of financial interest. And if you listen to her, you could have the feeling that you are listening to a candidate from the extreme left. So the situation is confused. And quite a few number of workers in France, you know, identify to, actually, Le Pen, to the extreme right. And, fortunately, we have this candidate Mélanchon and the Front Gauche now which is developing some kind of more radical policy than the Socialist Party. So now, in the recent weeks, in recent months, people move to vote to the candidate of the extreme—extreme is exaggerating; you know, I should say a more radical left, or maybe a more real left than the Socialist Party.

JAY: Right. Now a lot of analysts have said that part of this crisis in Europe is the banks, the financial elite taking advantage of the crisis to undo the social safety net, undo the European welfare state, if you will. As that starts to proceed in France, what’s the state of the mass movement in terms of mobilizing outside of these electoral politics?

DUMÉNIL: But, you know, in France, people are used to this system of social protection. Okay? We have a rather sophisticated system, with health insurance, okay, public health insurance, retirement, okay, and unemployment benefits, and this sort of thing. In France, people are really used to that, so it’s very difficult for a government like Sarkozy, okay, to cut these expenses.

Sarkozy is really the president of the rich. You know. I have friends who are—people I know who are sociologists. They wrote a very famous, very successful book whose title is The President of the Rich. Okay? And this is absolutely true. Okay? So it—this government is doing everything to cut social expenses, to cut social programs. But there is a lot of resistance. What they do is that they are cutting slowly, slowly, and slowly. Okay? You take a drug. For some reason, you discover that now they found that this drug is not efficient, so they will not reimburse, you know, this drug in this insurance system. In hospital, the situation is deteriorating a lot. If you speak with medical doctors, okay, even people high in the hierarchy, they will complain, you know, that they cannot work. Why? Because they are constantly reforming, constantly cutting, you know, expenses and so on. So these people are working in conditions which are constantly deteriorating. So it’s not that they are really getting rid of the system of social protection in France, because people would be in the street. It’s just a constant pressure, you know, constantly cutting, constantly creating more difficult situation.

JAY: And just—I know this is a big topic, but just as quickly as we can—we don’t have too much time—how is the current crisis in the euro zone, quote-unquote, “managed”? In other words, can they keep finding ways to paper over the crisis? Or is there any imminent possibility of this thing really unraveling?

DUMÉNIL: You know, now in the world, in the U.S. and in Europe, the crisis entered into a second phase. Okay? So the second phase is first this was a crisis of the financial system, and it developed at the end of 2008 into a big recession. Okay? Now the crisis is the crisis of government, the crisis of sovereign debts. Okay? And this is true in the United States, and this is also true in Europe. But in the United States, the policy of the Federal Reserve was very strong. Okay? With quantitative easing they are financing the government. In Europe, there are a lot more resistance. And in Europe, because of the diversity of countries, there are international pressure, for example, coming from Germany, because Germany is not growing better than France, contrary to what you can read in the press. But, you know, they have less deficit of the government, and before the crisis, before 2007, they cut social expenses tremendously. They diminished lower wages; the lower fraction of wages they diminished considerably. So in a sense, in this sense, you know, maybe Germany is doing better, except that the cost for popular classes has been huge. So now in France we have exactly this situation, which is, okay, we should imitate Germany. Okay? And because Germany did better, this mean what? Cut social expenses, diminish lower wages. Okay. So that’s—.

The situation, you know, the problem is the central bank. The central bank in Europe is not the Federal Reserve. Okay? The Federal Reserve, I believe, is more committed to the interests of the country, and now they are supporting the U.S. economy very strongly because you will also have elections. Okay? So I believe, personally, you know, that they are taking care of the economy, taking—they tried to postpone, to delay the coming recession [crosstalk]

JAY: At least until after November elections. Then we’ll see.

DUMÉNIL: Exactly. Exactly. That’s what I am saying now, but maybe you know better than me about that. But in France—in Europe we don’t have this type of situation now. So, yeah, the problem is accumulation of debt from governments and how to manage that. In Europe, you know, it’s certainly—you see, let me tell you something, my feeling, personally. In the United States, I’m not saying that the situation is nice at all. Okay? But, you know, there is a very strong national factor, in the sense that there is a very strong national feeling of the country as being a powerful country in the world. If you go to Europe, okay, you don’t have this feeling. Because you have a diversity of countries, there is no national feeling at all. Okay? And I think that this political or national or nationalist, if you want, or political factor is not playing at all exactly in the same manner in Europe and in the United States. And this is really a huge problem, a huge problem in Europe.

JAY: Which means all the various elites can’t get together even to save themselves.

DUMÉNIL: Exactly. Exactly. You see, what’s happening is that Germany is looking down to other country, to Greece. You know, what were these guys doing? You know, they were spending money without care and so on.

JAY: Yeah, they can’t vote in the German election, so what the hell?

DUMÉNIL: So you see the problem was the same [incompr.] country like Spain, like Spain. But this situation is rather complex. We would have to analyze that country after country, okay, and because it’s not the same situation in every country.

JAY: Well, we’ll come back and talk more after April 22, and we’ll come back again to the situation of France.


JAY: Thanks very much for joining us, Gérard.

DUMÉNIL: Okay. Thanks to you. It was a pleasure for me.

JAY: And thank you for joining us on The Real News Network.


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Gerard Dumenil is an economist and Former Research Director in the French National Center for Scientific Research. He is the co-author of The Crisis of Neoliberalism and presently working on a new book, entitled The Stability Frontier.

Thank you for joining us.