After the Cahuzac scandal, the Hollande presidency is in tatters

France's Socialist president has failed to deliver - and in record time.

Barely ten months after his election, François Hollande is a lame duck President. He is even more unpopular than Nicolas Sarkozy was at the same stage of the presidency. The French people elected him in May 2012 because they had had enough with Sarkozy’s right-wing politics which deeply divided the nation. They wanted change. Hollande’s austerity policies and his alignment on Angela Merkel’s positions in Europe have dramatically failed to make a difference so far.The majority of the population even feels that there is a troubling continuity with Sarkozysm on major policy areas such as employment, pensions, benefits, wages, not to mention the neo-colonial war waged by French troops in Mali.

Now, the Hollande presidency is in tatters. A state scandal is threatening to engulf Hollande and the Socialist government. The person responsible for the crisis is Jérôme Cahuzac, who was the Budget Minister until two weeks ago. For the past few months, Cahuzac had been accused of having used a secret Swiss bank account to avoid paying taxes in France. Those allegations were made by Mediapart, an investigative website run by Edwy Plenel, a former editor-in-chief for Le Monde newspaper. The accusations were repeatedly denied by Cahuzac before the President, the Prime Minister,the members of parliament and various media. On 2 April, Cahuzac suddenly admitted to a judge that he hid €600,000 (£510,000) offshore for over twenty years. He was immediately placed under formal investigation for laundering the proceeds of tax fraud by French justice. Hollande appeared on national television the next day and said that Cahuzac’s actions were an "unforgivable moral error".

This dramatic development could not have happened at a worst time for a beleaguered President, nor could the trouble have come from one of the most sensitive departments in government. Indeed, as Budget Minister, Cahuzac was the man in charge of fighting tax evasion. He was also responsible for leading a crusade against tax heavens on behalf of the French State. He had the task of streamlining the budget and running the government’s crackdown on rich people who would be made to pay more taxes. When two weeks ago Cahuzac resigned, Hollande applauded his decision to "better defend his honour". For Hollande and Jean-Marc Ayrault – Hollande’s Prime Minister – it is a no-win situation. If they now acknowledge that they had misgivings about Cahuzac’s probity, they would be held responsible. Thus, they can only claim that they knew nothing about the scandal. In the best case scenario, the executive comes across as weak and indecisive.

Hollande, Ayrault and Socialist members of parliament have tried hard to downplay the whole Cahuzac episode. They argue that it is a personal betrayal and the story only poses a "moral issue". In truth, the Cahuzac scandal has only marginally to do with the dishonesty of a man. It is much more than the sad personification of the "bastard" as defined by Jean-Paul Sartre. No, the Cahuzac swindle also exposes political manipulations and lies at the heart of the Hollande presidency. It truly is a state scandal which creates a political crisis whose political ramifications will be multiple and hard to predict.

Who is Jérôme Cahuzac? This 60 year-old man was a cardiologist who became a plastic surgeon specialising in hair transplants. In this new profession, the disgraced minister amassed a large personal fortune. Cahuzac comes from the self-professed neoliberal/Blairite wing of the Socialist Party. In a recent television debate with Jean-Luc Mélenchon, the leader of the Left Front, he haughtily conceded that never in his thirty-year long career in the Socialist Party, he had "believed in class struggle". When Ayrault appointed him to the government, several party officials warned the Prime Minister that this was a hazardous decision. Arrogant and briskwith his colleagues, Cahuzac belongs to a breed of "Socialists" that ignores virtually everything of the travails of the electorate who brought Hollande to power last year. What is more, Cahuzac was in government the zealous promoter of the harshest austerity policies that France has ever experienced since the end of the Second World War. Here is a man who not only lectured the public about fraud evasion while being a fraudster himself, but who was also responsible for implementing and monitoring unfair and pointless economic policies – such as his target of reducing France’s public deficit to 3 per cent - which inflicted unnecessary suffering on the worst off in society.

Until the New York sex scandal which put an end to his political career, Cahuzac was a "Strausskahnian", i.e. a close and devoted political ally of Dominique Strauss-Kahn. The two "Socialists" shared the same lavish and insouciant lifestyle and the same taste for laissez-faire economics. Both men were friendly with the rich and powerful and bothentertained dubious relationships in the political world. Mediapart has revealed that Philippe Péninque was the person who discretely opened Cahuzac’s bank account in Switzerland in 1992. Péninque used to be a member of Groupe Union Défense (GUD), a violent student union on the extreme right. He is currently a close friend and confident of Marine Le Pen.

Hollande’s responsibility is here clearly engaged as it should have been clear from the start that Cahuzac’s appointment was politically hazardous. A cabinet minister recently revealed that Cahuzac was responsible for messing up the handling of the tax bill on very high earners - the "75 per cent tax" on people earning over €1 million. Warned that some provisions in the bill might be censored by the Constitutional Council, Cahuzac opted to go ahead with it. The bill indeed ended up being censored by the French Supreme Court. Only days ago, Cahuzac was still presented in Socialist circles as the paragon of "good governance" and as a ‘competent and brilliant minister’. How was it possible to appoint such a man to a Socialist cabinet in the first place?

One may put the question to Pierre Moscovici, the Minister of Finance. After Cahuzac’s exit, Moscovici is the last "Strausskahnian" left in government. One of the rare Blair admirers in France, Moscovici now stands accused by Mediapart of having used the State apparatus to try to whitewash his political friend. Weeks ago, Moscovici declared that he had inquired to the Swiss banking institutions about Cahuzac’s secret account and that he was satisfied that no such account existed.

The Cahuzac scandal is well and truly essentially a political scandal. This episode involves a caste of politicians who have completely let down the people who elected them. Some thought that they were untouchable. After ten months in office, this Socialist government has already turned its back on the needs and aspirations of the working people.

Philippe Marlière is professor of French politics at University College London. He tweets @PhMarliere

The French president François Hollande (2nd left), followed by prime minister Jean-Marc Ayrault and the former budget minister Jerome Cahuzac. (Photo: Getty.)
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Who is the EU's chief Brexit negotiator Michel Barnier?

The former French foreign minister has shown signs that he will play hardball in negotiations.

The European Commission’s chief Brexit negotiator today set an October 2018 deadline for the terms of Britain’s divorce from the European Union to be agreed. Michel Barnier gave his first press conference since being appointed to head up what will be tough talks between the EU and UK.

Speaking in Brussels, he warned that UK-EU relations had entered “uncharted waters”. He used the conference to effectively shorten the time period for negotiations under Article 50 of the Lisbon Treaty, the legal process to take Britain out of the EU. The article sets out a two year period for a country to leave the bloc.

But Barnier, 65, warned that the period of actual negotiations would be shorter than two years and there would be less than 18 months to agree Brexit.  If the terms were set in October 2018, there would be five months for the European Parliament, European Council and UK Parliament to approve the deal before a March 2019 Brexit.

But who is the urbane Frenchman who was handpicked by Commission President Jean-Claude Juncker to steer the talks?

A centre-right career politician, Barnier is a member of the pan-EU European People’s Party, like Juncker and German Chancellor Angela Merkel.

A committed European and architect of closer eurozone banking integration, Barnier rose to prominence after being elected aged just 27 to the French National Assembly.  He is notorious in Brussels for his repeated references to the 1992 Winter Olympics he organised in Albertville with triple Olympic ski champion Jean-Claude Killy.

He first joined the French cabinet in 1993 as minister of the environment. In 1995, Jacques Chirac made him Secretary of State for European Affairs, teeing up a long and close relationship with Brussels.

Barnier has twice served as France’s European Commissioner, under the administrations of Romano Prodi and José Manuel BarrosoMost recently he was serving as an unpaid special advisor on European Defence Policy to Juncker until the former prime minister of Luxembourg made him Brexit boss.“I wanted an experienced politician for this difficult job,” Juncker said at the time of Barnier, who has supported moves towards an EU army.

 

Barnier and the Brits

Barnier’s appointment was controversial. Under Barroso, he was Internal Market commissioner. Responsible for financial services legislation at the height of the crisis, he clashed with the City of London.

During this period he was memorably described as a man who, in a hall of mirrors, would stop and check his reflection in every one.

Although his battles with London’s bankers were often exaggerated, the choice of Barnier was described as an “act of war” by some British journalists and was greeted with undisguised glee by Brussels europhiles.

Barnier moved to calm those fears today. At the press conference, he said, “I was 20 years old, a very long time ago, when I voted for the first time and it was in the French referendum on the accession of the UK to the EU.

“That time I campaigned for a yes vote. And I still think today that I made right choice.”

But Barnier, seen by some as aloof and arrogant, also showed a mischievous side.  It was reported during Theresa May’s first visit to Brussels as prime minister that he was demanding that all the Brexit talks be conducted in French.

While Barnier does speak English, he is far more comfortable talking in his native French. But the story, since denied, was seen as a snub to the notoriously monolingual Brits.

The long lens photo of a British Brexit strategy note that warned the EU team was “very French” may also have been on his mind as he took the podium in Brussels today.

Barnier asked, “In French or in English?” to laughter from the press.

He switched between English and French in his opening remarks but only answered questions in French, using translation to ensure he understood the questions.

Since his appointment Barnier has posted a series of tweets which could be seen as poking fun at Brexit. On a tour of Croatia to discuss the negotiations, he posed outside Zagreb’s Museum of Broken Relationships asking, “Guess where we are today?”

 

 

He also tweeted a picture of himself drinking prosecco after Boris Johnson sparked ridicule by telling an Italian economics minister his country would have to offer the UK tariff-free trade to sell the drink in Britain.

But Barnier can also be tough. He forced through laws to regulate every financial sector, 40 pieces of legislation in four years, when he was internal market commissioner, in the face of sustained opposition from industry and some governments.

He warned today, "Being a member of the EU comes with rights and benefits. Third countries [the UK] can never have the same rights and benefits since they are not subject to same obligations.”

On the possibility of Britain curbing free movement of EU citizens and keeping access to the single market, he was unequivocal.

“The single market and four freedoms are indivisible. Cherry-picking is not an option,” he said.

He stressed that his priority in the Brexit negotiations would be the interests of the remaining 27 member states of the European Union, not Britain.

“Unity is the strength of the EU and President Juncker and I are determined to preserve the unity and interest of the EU-27 in the Brexit negotiations.”

In a thinly veiled swipe at the British, again greeted with laughter in the press room, he told reporters, “It is much better to show solidarity than stand alone. I repeat, it is much better to show solidarity than stand alone”.

Referring to the iconic British poster that urged Brits to "Keep Calm and Carry On” during World War Two, he today told reporters, “We are ready. Keep calm and negotiate.”

But Barnier’s calm in the face of the unprecedented challenge to the EU posed by Brexit masks a cold determination to defend the European project at any cost.

James Crisp is the news editor at EurActiv, an online EU news service.