Don't look to François Hollande for inspiration, Ed

The French Socialist leader is a throwback, not a pioneer.

On Wednesday, François Hollande’s budget announced the doubling of a tax already planned by Nicolas Sarkozy, giving a sliver to the state of certain transactions executed in financial markets. So what, you say. Banks can afford it, can’t they? Besides, they messed up: they should pay. But it’s not that simple: like VAT or any other sales tax, the cost is simply passed on to the buyer; a paltry half-billion euros will be raised annually and the law is full of loopholes. Plus, the original Sarkozy tax was only scheduled to come into force the same day, so no-one yet knows what the effects are.

Clearly, there is a political point being made that banks must pay for their sins, but: at what cost? The advantages of a financial transactions tax are unproven, to say the least. At best, it seems like posturing: at worst, it adds to the cost of companies, and the country, raising capital, affecting growth and competitiveness. Plus, with a unilateral move, there is always the danger that people will simply take their business elsewhere, which is why no-one here – not even Miliband –  is suggesting such a unilateral tax for the City, a financial centre which easily dwarfs Paris.

Perhaps, then, it’s a good moment to take a closer look at the Hollande administration. He has, at least, one sensible positive: his belief that growth is the key rather than austerity. Good. However, unlike the UK, Eurozone rules cap his borrowing, meaning next year he needs to make €33bn of cuts. So one wonders how he can fulfil pledges which require him to spend to achieve that growth.

Then there’s his manifesto proposal for a 75 per cent “super tax” for earnings over €1m, a move not seen in Britain since the days of Denis Healey (that said, his own advisor, Harvard’s Prof. Philippe Aghion, admits it was probably just an electoral sop to the left that he didn’t really mean). But many suggested that Hollande’s manifesto largely comprised things he would not really implement, and which he now has. And these are nothing compared to Hollande’s decision to lower the national retirement age from 62 to 60, which gives an insight into some very flawed thinking, because it doesn’t seem to make sense at the level of basic maths. The explanation is quite simple and goes like this:

If I pay a portion of my salary towards a pension, I create a pot, which the government looks after for me. When I retire, that pot buys me a pension until I die, the level of which depends on the size of the pot. Four things determine the size of my pot: the percentage I pay in from my salary; the number of years; the amount I work each year (working hours, holidays, and so on); and the fourth and final thing is the number of years I’m likely to live – the more years, the bigger pot I’ll need.

The problem is in the fourth factor. Most national pension systems in the western world are broke, and are on the verge of not being able to pay out to all the pensioners. They didn’t quite count on so many people staying alive so long, so they under-provided. Most governments are therefore trying to find ways to fund the “pensions time-bomb”, by getting more money into each person’s pot.

So, what you’ve got to do is change one of the first three factors. But in France, the amount you work each year is already fixed at a relatively low level, because of its uniquely-constricting thirty-five hour week and generous statutory holidays. Then there’s the number of years you work, which in France we have just reduced by two. That leaves only one thing: to increase national insurance; raise taxes on those who are working to pay for those who aren’t – which is not really sustainable (particularly during an economic crisis). For this reason, policymakers worldwide are accepting an inevitability: people will have to work longer.

Ah, but not in France. Not in the homeland of Lagrange, Fourier and Descartes, where mathematics nowadays apparently work differently. Or rather, the raising of pensionable age makes no sense at all, because sooner or later the government will have to reverse it, as will all governments. And, in the meantime, it makes the ticking time-bomb worse. It is a sweetie, handed out to make people feel better: Hollande will give you a sweetie today, but some future government will need to take it back tomorrow twofold.

What is most disappointing for the left about Hollande, then, is that he seems much less the avant-guardiste of a new paradigm for the left, than a throwback to old, ostrich-like ways of the 1970s. It fits, too, because France itself has traditionally been the last big country in the west to accept realities such as flexible labour markets and the death of trade protectionism, as global business moves east.

The danger for Hollande, in short, is that he could end up like Spain's “Crisis? What crisis?” Zapatero, someone many on the left also had high hopes for, and whose career ended in ignominy as he was ultimately forced to take back all the sweeties. Miliband was politically astute in taking advantage of the apparent lack of connection between Hollande and Cameron, and right in going to Paris to make common cause with practically the only socialist premier left. But that, perhaps, should be as far as it goes.

Rob Marchant is an activist and former Labour Party manager who blogs at The Centre Left

French President François Hollande welcomes Labour leader Ed Miliband before a meeting at the Elysée Palace in Paris. Photograph: Getty Images.
GETTY
Show Hide image

Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue