In an attempt to improve his 18 percent approval rating at the beginning of the new year, liberal French President Francois Hollande promised a “responsibility pact” to aggravated French firms. The pact is aimed at boosting France’s stagnant growth by, among other things, cutting 30 billion euros in payroll taxes to ease the burden of funding France’s welfare system. This conservative turn in Hollande’s economic policies and electoral promises unveils his increasing desperation to try and shift the nation’s economy in an effort to regain public support. These reforms are necessary and overdue, but were unsurprisingly met with hostility from Hollande’s fellow leftists. To them, Hollande is betraying his political ideals.
It was announced last month who would become the face of the “responsibility pact.” On March 31, Hollande assigned Barcelona-born Manuel Valls, ex-minister of the interior, to replace Jean-Marc Ayrault as prime minister of France. Like Hollande, Valls is a member of the Socialist Party, but his beliefs are moderate. Indeed, five years ago he even suggested that his party replace “socialist” in its name. In the years since, members of the French left have rejected their trust in Valls. Upon discovery of Valls’ promotion to prime minister, the Green Party announced that it would refuse to continue to participate in Hollande’s government. Valls is known for his no-nonsense reputation, which explains why he is a bad team player, but Hollande’s choice in Valls was a smart one. Hollande’s brand of liberalism, which has proven ineffective so far, was in need of an injection of centrism.
During his inaugural speech, Valls promised much-needed tax cuts and budget savings, an announcement that marked a complete U-turn from Hollande’s previous policies. In his first two years as president, four-fifths of fiscal consolidation came from tax increases. Now Valls has promised the opposite: significant tax cuts. Although still just promises, Valls seems steadfast in his commitment to reform — he insists on saving a further 11 billion euros from tax cuts on top of Hollande’s promised 80 billion euros. Valls’ sensible austerity resembles the late British Prime Minister Margaret Thatcher’s — something the French will not appreciate but so desperately need.
Hollande’s choice of prime minister is a reaction to disapproval. With Valls’ moderate values and 58 percent popularity rating — the highest for a new midterm prime minister — he has the potential to do a lot of good for Hollande, France and the rest of Europe. Valls must not be discouraged by public response to his Thatcherism. His budget savings and tax cuts will serve the nation well.
Vittorio Bisin is a staff columnist. Email him at [email protected].
