By Ambrose Evans-Pritchard
We have a minor earthquake in France. A party committed to withdrawal
from the euro, the restoration of French franc, and the complete
destruction of monetary union has just defeated the establishment in the
Brignoles run-off election.
It is threatening Frexit as well, which rather alters the political chemistry of Britain's EU referendum.
Marine Le Pen's Front National won 54pc of the vote. It was a bad
defeat for the Gaulliste UMP, a party at risk of disintegration unless
it can find a leader in short order.
President Hollande's Socialists were knocked out in the first round,
due to mass defection to the Front National by the working-class
Socialist base. The Socialists thought the Front worked to their
advantage by splitting the Right. They have at last woken up to the
enormous political danger.
The Front National is now the most popular party in France with 24pc
according to a new Ifop poll. Both the two great governing parties of
the post-War era have fallen behind for the first time ever. The
Gaullistes (UMP) are at 22pc, and the Socialists at 21pc.
I am watching this with curiosity, since
Marine Le Pen told me in June that her first order of business on
setting foot in the Elysee Palace (if elected) would be to announce a
referendum on membership of the European Union, with a "rendez-vous" one year later:
I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal. Europe is just a great bluff. On one side there is the immense power of sovereign peoples, and on the other side are a few technocrats.
Asked if she intended to pull France of the euro immediately, she
hesitated for a second or two and then said: "Yes, because the euro
blocks all economic decisions. France is not a country that can accept
tutelage from Brussels."
Officials will be told to draw up plans for the restoration of the
franc. Eurozone leaders will face a stark choice: either work with
France for a "sortie concerted" or coordinated EMU break-up: or await
their fate in a disorderly collapse.
"We cannot be seduced. The euro ceases to exist the moment that
France leaves, and that is our incredible strength. What are they going
to do, send in tanks?"
Her four sticking points on EU membership are withdrawal from the
currency, the restoration of French border control, the primacy of
French law, and what she calls "economic patriotism", the power for
France to pursue "intelligent protectionism" and safeguard its social
model. "I cannot imagine running economic policy without full control
over our own money," she said.
As I wrote in June, the Front has been scoring highest in core
Socialist cantons, clear evidence that it is breaking out of its
Right-wing enclaves to become the mass movement of the white working
class.
Hence the new term in the French press "Left-Le-Penism". She is
outflanking the Socialists with attacks on banks and cross-border
capitalism. The party recently recruited Anna Rosso-Roig, a candidate
for the Communists in the 2012 elections.
Mrs Le Pen's EMU withdrawal plan is based on a study by economists
from l'École des Hautes Études in Paris led by Professor Jacques Sapir.
It concludes that France, Italy, and Spain would all benefit from
EMU-exit, restoring lost labour competitiveness at a stroke without
years of depression.
Their working assumption is that the eurozone's North-South
imbalances have already gone beyond the point of no return. Attempts to
reverse this by deflation and wage cuts must entail mass unemployment
and loss of the industrial core.
Prof Sapir said the gains are greatest in a coordinated break-up with
capital controls where central bank intervention steers the new
currencies to target levels. The model assumes that the D-mark and
guilder are held to a 15pc rise against the old euro, while the franc
falls 20pc.
The gains are less if EMU collapses in acrimony and currencies
overshoot. This would inflict a violent deflation shock on Germany, but
would still be strongly positive for the Latin bloc.
I don't wish to get into a debate about whether or not the Front
National has genuinely purged its anti-Semites, or whether its
immigration and culture policies must inevitably lead to a drastic
showdown with France's 5m-plus Muslims. This is a finance blog.
My own impression is that she is more relaxed about gay rights and
abortion than she lets on, closer in some ways to the assassinated Dutch
populist Pim Fortuyn than to her father Jean-Marie Le Pen, who in turn
complains that she picked up "petit bourgeois" views in Paris schools.
The fact is that her campaign of "dédiabolisation" or image
detox seems to have worked. Only a minority of voters still thinks the
Front is a "threat to democracy". Mrs Le Pen is winning over white
working-class women in droves. The feminised Front is no longer the
party of the angry white male.
While her father called the Holocaust an historical "detail", she
calls it the "pinnacle of human barbarism". I can understand why a lot
of people disregard this as cynical repackaging. Parties don't change
their character so quickly. But as Socialist advisers have warned Mr
Hollande, the game has changed. It is no longer enough to keep
insisting that the Front is beyond the pale. There is a new fact on the
ground.
I might add that the Front is nothing like Ukip, a mostly
pro-American, Right-leaning, libertarian, anti-welfare, free-market
party. Marine Le Pen is an ardent defender of the French welfare model.
Her critique of capitalism gives her a Leftist hue. Some call it 1930s
national socialism, and here we are starting to touch on the populist
appeal.
She fulminates against Washington and Nato, calling for France to
retake its place as "non-aligned" voice in a multipolar world, and
lashing out at the Gaulliste UMP for selling its soul to Europe and the
Anglo-Saxon order. "There was a de Gaulle of the Left, and a de Gaulle
of the Right. There were two de Gaulles. We stand for both," she said.
The rise of the Front National is yet another reminder that the
slow-burn political crisis in Europe has yet to reach its climax. Mass
unemployment and the gruelling effects of debt deflation are chipping
away at the foundations of the establishment, just as they did in the
early 1930s under the Gold Standard, so like EMU today.
France endured the same slow torture then, stoically accepting the
"500 deflation decrees" of premier Pierre Laval. That dispensation
seemed stable for a while. It was not. The dam broke in 1936 with the
once unthinkable of the Leftist Front Populaire, with Communist support.
The Gold Standard collapsed.
Angela's Merkel's Fiscal Compact (to use the term broadly) is really
just a modern version of Laval deflation. There was no good
macroeconomic reason for forcing France to squeeze fiscal policy so
violently over the last two years, tipping the economy back in
recession. The measures were shoved down France's throat done because
austerity for its own sake (without offsetting monetary stimulus) is EMU
doctrine, and because France has allowed Germany to call the shots.
We can argue over whether the policy has been counterproductive in
economic terms. What is crystal clear is that it has shattered the mould
of French politics, opening the door to the Front National.
It is now highly likely that the Front will sweep the European
elections next May, a vote perfectly suited to their agenda. It will not
be alone. Euro-sceptics look poised to storm the Strasbourg Hemicycle.
That will be another fact on the ground.
The worst fears of the EU elites are starting to come true. It is entirely their own fault.
No comments:
Post a Comment