Portrayed as a directionless muddler in the British press, François Hollande has achieved more in two years than he is given credit for, say Roger Liddle and Renaud Thillaye

François Hollande has aroused all kinds of feelings within Labour’s ranks over the last two years. From early indifference, the French president managed to spark curiosity and respect after his winning bid against Nicolas Sarkozy. Disillusion came quickly when it appeared that he could not do much to reverse the austerity course imposed on Europe from Berlin and Brussels. Today, Hollande looks more like a scarecrow: scorn is poured on him, with poor ratings and a seemingly unclear policy direction. As a result commentators warn Ed Miliband against ‘Hollandisation’ if he makes it to Downing Street in 2015.

Certainly, Hollande has not done everything right in his nearly two years in office. The discrepancy between a left-oriented, anti-finance campaign and the harsh spending cuts he has been implementing has inevitably disappointed the most left-leaning elements within the president’s party and the wider French left. The failure to renegotiate the new eurozone fiscal treaty with Angela Merkel was seen as treacherous and weak. Moreover, beyond his promise to govern as ‘Mr Ordinary’ after the ‘bling-bling’ presidency of Sarkozy, Hollande has struggled to find a practicable governing style. Government ‘couacs’ have been numerous since his election in May 2012, from his budget minister being convicted of tax evasion to hesitation and discord over tax policy, as well as confusion over issues such as Roma immigration and, most recently, the government backtracking on its family bill. All of this gives the impression of an ill-prepared team led by a ‘directionless muddler’.

However, Hollande deserves more credit than that accorded him by the British media. Anyone seriously interested in the lessons that the Socialist government’s experience can teach Labour should look at it in more detail. If anything, the Socialist party has attempted to address the most pressing fiscal and competitiveness issues faced by France while maintaining a strong focus on longer-term challenges.

Perhaps the least-heard, though most-deserved, compliment is that Hollande has been the most reformist French president in decades. While Sarkozy was all talk but little action, the current president has been reminiscent of Pierre Mendès-France, an uncharismatic centre-left figure who nevertheless tackled some serious issues in his short, eight-month premiership in 1954-55, mainly by speaking the language of truth and common sense. The Socialist government has, for instance, reformed pensions while making sure that those coming up to retirement or with health issues are not affected. Companies have been given more German-style flexibility in exchange for transferable lifelong training rights for employees. Most recently, Hollande announced a ‘responsibility pact’ between the government and employers. Ongoing negotiations should lead to a €30bn tax cut for businesses in exchange for significant job-creation commitments.

All these deals are good news in a country prone to protest and political blockades. The politics of social dialogue and burden-sharing has brought about interesting and often overlooked results. Ironically, social democracy seems to have eventually become reality in France.

The French are certainly not out of the woods and a lot more needs to be done to redress the country’s flagging competitiveness and to increase the efficiency of public spending. Yet Hollande has been pursuing, though perhaps not outspokenly enough, a genuine supply-side agenda which sounds very similar to Miliband’s vision of responsible capitalism. This is a ‘race to the top’ agenda whereby businesses have to take on their fair share of social and environmental responsibility, and in which education, training and industrial activism are the path to global success as opposed to lower social standards. In that respect, Labour could learn from the early steps of France’s newly created and regionally managed public investment bank – the Banque Publique d’Investissement – which is focused on lending to innovative small and medium-sized businesses.

The French Socialist experience nevertheless offers one sobering lesson. In today’s competitive environment where capital is mobile, the centre-left should not fool itself by thinking it can cut the deficit by taxing the rich or waiting for growth to return. The Socialist party never really learned the lesson of 1983, when François Mitterrand had to make a policy U-turn and embrace austerity after two years of unrestrained stimulus. For Labour, this means that a significant effort has to be made before the election to prepare the ground for future savings. A transparent public spending strategy offers an opportunity to ponder the state’s investment priorities, and it would thus help avoid a great deal of voter disappointment after the election.

Another key issue is that the Socialist party and Labour need to work together on a growth-oriented agenda for Europe. Since his election, Hollande has been confronted with a majority of conservative governments not keen on changing the dominant course of ‘coordinated austerity’. Some progress has been made, from a more proactive European Central Bank to the German plan for a minimum wage and a more investment- and youth-oriented European Union budget. Yet, crucially, Hollande will need a Labour government’s support to reform the way the eurozone is managed, whereby countries experiencing trade surpluses also have to ‘rebalance’ their economies. David Cameron has tended to wash the UK government’s hands of any role in helping to solve the eurozone crisis, yet Britain has an enormous domestic interest in seeing the currency union stabilise and return to growth.

Furthermore, France and Britain should work together on an industrial agenda supporting key high added-value sectors for Europe’s future competitiveness. The EU’s action in this field should not be limited to a restrictive state aid policy. The fight against tax avoidance and some form of coordination of the corporate tax base could also figure at the top of their priorities as a way to tackle damaging intra-EU competition. This is a just cause for the centre-left and a way to show that the EU does not integrate markets to the detriment of the common good.

A final area in which the scope for Franco-British cooperation is immense is in foreign affairs, defence and security. Although the 2010 Lancaster House treaties have unleashed a new era of common capability building, the British government remains overly cautious on these strategic issues. On the back of a more positive approach to Europe, Miliband and Labour could advance this agenda by leaps and bounds.

For all these reasons it is high time to break the ice between the Socialist party and Labour, get over any prejudice and make the best of common interests both domestically and at EU level.

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Roger Liddle is a member of the House of Lords and chair of Policy Network. Renaud Thillaye is senior researcher at Policy Network

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Photo: Webstern Socialiste