Faced with the extreme danger that a possible electoral victory for the National Rally represents for French democracy, the left has decided to unite. But unfortunately it did so under conditions such that its historical division once again appeared obvious.
An electoral agreement is certainly a good thing because it allows, in the first round, to reduce the chances of success of the RN candidates. Was it necessary at the same time that Place publique, the movement created by Raphaël Glucksmann, the socialists, the ecologists, the communists joined LFI to try to make people believe that they were going to govern the country and to this end sign what they call for a break-up program? We did not need a new “Popular Front” to fight against the far right. The call for the creation of a true republican front would have been enough.
A masterpiece of demagogy and laxity
Especially since the government program negotiated on the socialist side by Olivier Faure himself, and therefore imposed by the party apparatus on the unfortunate Glucksmann, is on the economic level a real catastrophe which will not promote success at the polls. Proposing spending of one to two hundred billion euros when the situation of public finances would impose the exact opposite plan on us is a denial of reality. To further assert that La France Insoumise could be transformed by escaping the dictatorial power of Jean-Luc Mélenchon is a myth. The radicalized left has, once again, exercised its influence over the social-democratic left, which had just won the European elections for the first time.
To make largely disoriented citizens swallow their pill, the authors of this masterpiece of demagoguery and laxity seek to capture for their own benefit previous experiences presented as great successes. Thus they refer explicitly to Léon Blum and the Popular Front of 1936 as well as the Mitterrandian project of 1981. This use of the past is either bad faith or a real historical ignorance.
Economically, the 1936 Popular Front program discussed between socialists and radicals was relatively modest. Above all, it only constituted a basis for mutual withdrawal in the second round of elections, each party defending its own intentions in the first round. In fact, the results of the ballot boxes having led Léon Blum to the head of government, the experience was essentially limited to an undeniable social reformism. The Matignon agreements, signed on June 7, 1936 by the CGT and employers at the initiative of the government, decided on an increase in wages of 12% on average. The law also provided for two weeks of paid leave and the reduction from 48 to 40 hours of the working week.
Yes, the corresponding expenses, undoubtedly made unavoidable due to the social situation, were of the same order of magnitude as those planned today by the New Popular Front: increase in the minimum wage of 14%, 10% of the salary of all employees. civil servants, indexation of salaries to inflation and pensions to salaries, retirement at 60 set as a new objective. Except that the signatories of this new pact forgot to specify that Léon Blum, elected president of the Council in June 1936, was forced to resign a year later. The rise in prices very quickly erased that in wages and the rise in business costs led to a decline in production, particularly industrial production. As a result, no improvement in the unemployment rate, an inevitable devaluation of the franc and the growing unpopularity of the government which led to the end of the Popular Front.
Keynesians are short-termists
The reference to the Mitterrand action of 1981, although much more recent, is even worse. Certainly, the recovery plan immediately implemented included a 10% increase in the minimum wage, a 25% increase in family allowances, and a lowering of the retirement age from 65 to 60 years. But these generous decisions were accompanied by compensatory measures in favor of businesses. Overall, they represented only a stimulus of 2.5% of GDP, or less than half of the current spending plans of the RN and the New Popular Front.
However, a revival by demand, even moderate but made at the wrong time compared to a world economy in recession given the battle against inflation launched by the United States, resulted above all in a deterioration of the trade balance of 1 % of GDP: when production does not follow, imports increase. Fundamental problem that our political leaders, in the vast majority, ignore: the good health of an economy is reflected in the long term by its supply capacity, therefore the efficiency of its productive system, the intensity of demand for being a consequence and not a cause. Keynesians, who think the opposite, are in fact short-termists.
Two major facts make the comparison between the current situation and the 1981-1983 period completely unfounded. The first is that the situation of the French economy at the beginning of the 1980s was much more solid than today. The balance of payments is practically in balance and the public debt only represents 20% of GDP, which gives the government obvious room to play, compared to 110% at the end of 2023. From the start of the year 1982, the ceiling of the budget deficit considered bearable was set, under the influence of Jacques Delors, at 3% of GDP, a ceiling which was never exceeded until the cohabitation of 1993, Édouard Balladur being Prime Minister. This discipline of French origin, validated by François Mitterrand, curiously became the rule at European level, which the New Popular Front wants to break!
The second, fundamental difference was the personality of the first Prime Minister when the left came to power. Pierre Mauroy was deeply reformist and social democrat. He knew the story of Léon Blum perfectly and had a sort of obsession: ensuring that the left could demonstrate the ability to govern the country over long periods of time, which had never been the case. From his first day at Matignon, where I had the honor of accompanying him, he knew that management rigor would be essential. We therefore implemented very quickly, in 1981, all 110 proposals of the presidential program. But from the failed devaluation of October 1981, we began to prepare the “turn of rigor” according to the expression of Pierre Mauroy* himself.
The first signal, as I said above, was budgetary. The truly founding act was the austerity plan of June 1982, occurring only a year after the election of François Mitterrand. It was necessary to put an end to the perverse sequence of recovery by demand, maintaining inflation at the time at 14% per year and necessarily leading to a series of devaluations – long live Venezuela, Jean-Luc Mélenchon would say. The solution was simple in principle: a few restrictive measures – of the order of 1% of GDP -, freezing of prices and wages for four months, which no one in the world had ever done, and a legal ban on any indexation. wages on prices, with the exception of the minimum wage. So the exact opposite of the current proposals of the New Popular Front. From 1983, inflation began to decline and all economic balances, including external ones, were restored very quickly after the supplementary plan of March 1983. On the one hand, social measures had been taken and on the other the protected economy.
Conclusion: yes, our civic duty is to do everything, including in terms of alliances, to prevent the National Rally from coming to power, which would be a real disaster. But the fight must continue: the government left will only be reconstituted if the social democrats permanently establish their power of conviction on the entire left.
Jean Peyrelevadepolytechnician and economist, is a senior civil servant, banker and business manager.
* Latest work published: Reform France (Odile Jacob, 2023).
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