Date: Mon, 15 Apr 96 13:32:05 GMT
Subject: Re: France's Hot December - 2



2. Causes

i) Budget Deficits

The immediate cause was Juppe's attack on a variety of fronts,
centrally on the number of years public sector workers would 
have to work before recieving their pensions - increasing from
37.5 years to 40 years.

But also in his plan were attacks on health and benifits, a .5%
increase in income tax, and removing the trade unions from control
over health insurance.

There were plans to privatise rail, amongst others.

But this has a "first cause" , namely, the need to reduce the
budget deficit in order to satisfy the conditions for EMU,
although "interestingly, much of the pressure for the cutbacks
comes from rival groups [ ie, rival to the "Euro integrationists"
] inside the ruling class and the conservative parties, who are 
hostile to EMU."

The size of this budget deficit has its own "first causes" , a general
one applying to all developed countries and a particular one applying
to Europe.

BUDGET DEFICITS IN GENERAL.

Harman quotes the Financial Times :

"The US has one. The Europeans have one, and now even Japan has one.
What do they all have ? A serious fiscal problem. This is the theme 
of the decade, one that will shape the rhythm of financial life and
form the cacaphonic background sound to political debate in almost 
every industrial country".

Harman locates the cause as the lower rate of growth in the 80s and
90's than in the 50's, 60's and 70's ( and which elsewhere he 
related to the fall in the underlying rate of profit ).

Again, the FT :

"The overall ratio of spending to GNP stabilised in the early 80's. 
It did so, however, at levels that governments were unable or unwilling
to fund ... The deficits ... increased the ratio of debt to GNP from
41 % in 1980 to 72% in 1995. Unfunded pension promises ensure that there
is worse to come almost everywhere."

EUROPE IN PARTICULAR

"In the 50's, 60's + 70's [European Capitalist States] were able to
enjoy high rates of profit and rapidly growing economies while
making substantial concessions to workers over wages, hours, and
wlefare - either as a response to high levels of industrial struggle
( Belgium 1960-61, France 68, Italy 69 - 75 ) or in order to preempt 
such struggles ( Scandanavia, West Germany )"

Despite attempts to reverse these reforms, European capital is still at
a disadvantage vs Japan and US Capitalism. 

"Its productivity levels are lower than in either Japan or the US, the
real wages it pays higher than the US ( but not Japan ) , and its 
employees work far fewer hours".

"Nor is that all". The average US worker works three weeks longer than
in 1980, while French workers two weeks less than in 1980" ie the trend
is moving the opposite way to the way the capitalists would want it to.

ii) Juppe's Tactics.

To cut a long story short, Juppe ignored the lessons of Thatcherism
and the Ridley Plan, which took a "salami" approach - attack each
section of workers slice by slice, making concessions when necessary
to avoid excessive generalisation. ( As eventually did Thatcher - 
discuss ).

He did this because ( Harmanesque "first causes" again ! ) the ruling
class were becoming very uneasy about his apparent concessions to
workers demands before and after his landslide election ( shown 
by a near run on the franc ).

"There was more panic than forethought to Juppe's 'coup' ".

"He also made ... serious error". He had upset what had been 
the big trade union most amenable to the schemes of French Capitalism,
Force Ouvriere."

The FO had arisen from a right split from the Communist CGT and 
had been allowed to organise many civil servants and key positions
in the employer - union committees that ran the 300 billion franc
( !! ) welfare insurance scheme. Not only did Juppe attack the
benifits themselves - he attacked the role of the union leaders
in administering the scheme itself. "The poodle turned bitterly
on its master".

However, the leader of the CFDT ( close to the Socialist Party ) ,
Nicole Notat, welcomed the "reform", asking for negotiation.
Perhaps this led Juppe to believe the protests would only be
symbolic.

He was wrong.


Adam.

Adam Rose
SWP
Manchester
UK


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