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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On the "one-state" solution to Israel and Palestine, what did Donald Trump mean?

The US President seemed to dismantle two decades of foreign policy in his press conference with Benjamin Netanyahu. 

If the 45th President of the United States wasn’t causing enough chaos at home, he has waded into the world’s most intricate conflict – Israel/Palestine. 

Speaking alongside Israeli Prime Minister Benjamin Netanyahu, Trump made an apparently off-the-cuff comment that has reverberated around the world. 

Asked what he thought about the future of the troubled region, he said: “I’m looking at two-state and one-state and I like the one that both parties like.”

To the uninformed observer, this comment might seem fairly tame by Trump standards. But it has the potential to dismantle the entire US policy on the Israeli-Palestinian peace process. Trump said he could "live with" either a two-state or one-state solution. 

The "two-state solution" has become the foundation of the Israel-Palestine peace process, and is a concept that has existed for decades. At its simplest, it's the idea that an independent state of Palestine can co-exist next to an independent Israel. The goal is supported by the United Nations, by the European Union, by the Arab League, and by, until now, the United States. 

Although the two-state solution is controversial in Israel, many feel the alternative is worse. The idea of a single state would fuel the imagination of those on the religious right, who wish to expand into Palestinian territory, while presenting liberal Zionists with a tricky demographic maths problem - Arabs are already set to outnumber Jews in Israel and the occupied territories by 2020. Palestinians are divided on the benefits of a two-state solution. 

I asked Yossi Mekelberg, Professor of International Relations at Regent's University and an associate fellow at Chatham House, to explain exactly what went down at the Trump-Netanyahu press conference:

Did Donald Trump actually mean to say what he said?

“Generally with President Trump we are into an era where you are not so sure whether it is something that happens off the hoof, that sounds reasonable to him while he’s speaking, or whether maybe he’s cleverer than all of us put together and he's just pretending to be flippant. It is so dramatically opposite from the very professorial Barack Obama, where the words were weighted and the language was rich, and he would always use the right word.” 

So has Trump just ditched a two-state solution?

“All of a sudden the American policy towards the Israel-Palestine conflict, a two-state solution, isn’t the only game in town.”

Netanyahu famously didn’t get on with Obama. Is Trump good news for him?

“He was quite smug during the press conference. But while Netanyahu wanted a Republican President, he didn’t want this Republican. Trump isn’t instinctively an Israel supporter – he does what is good for Trump. And he’s volatile. Netanyahu has enough volatility in his own cabinet.”

What about Trump’s request that Netanyahu “pull back on settlements a little bit”?

“Netanyahu doesn’t mind. He’s got mounting pressure in his government to keep building. He will welcome this because it shows even Trump won’t give them a blank cheque to build.”

Back to the one-state solution. Who’s celebrating?

“Interestingly, there was a survey just published, the Palestinian-Israel Pulse, which found a majority of Israelis and a large minority of Palestinians support a two-state solution. By contrast, if you look at a one-state solution, only 36 per cent of Palestinians and 19 per cent of Israel Jews support it.”

 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.