European Politico-economics QA Mega-thread - Page 1064

TNS Kantar Sofres' monthly barometer, March edition.

Average of the monthly barometer of 7 polling companies

(1) suppressing the inhabitation tax, an unfair local tax which costs several hundreds of euros per year regardless of your revenue, for 80% of the households;

(2) suppressing two social contributions (health and unemployment) so that the difference falls directly into the pocket of workers, while rising by ~25% the CSG—a tax paid by the whole workforce and pensioners—to compensate and fund social security. At the end of the operation, someone working in the private sector and paid at minimum wage is expected to gain something like ~20€ per month. Basically it's a triple transfer: from gross to net; from the inactives (pensioners) to the active population; and, for the funding of social security, from contributions to taxes (fiscalization).

The government made the fairly gross mistake to implement progressively what it gives (the suppression of the inhabitation tax is scheduled over 3 years, to be fully effective in 2020; similarly, the net rise will be fully effective in October), while setting up instantly what it takes. Add a few increases (diesel, tobacco, gas, etc.) and the usual rise of private taxes (insurances, mutuals, tolls, etc.) and you get the general feeling that “the cost of life is rising”. Should be noted that the INSEE, our independent national socio-economic institute of statistics, estimated that households would pay an extra 4,5 billions of taxes in 2018 (“fake news!” replied the government).

The result, in January, is that:

- 5,4 millions of public servants saw the CSG rise, but the promised compensation was not made yet (the government blamed an informatic bug).
- 9 millions of pensioners (60% of them, theoretically those whose pension is above 1 200€ + Show Spoiler +) saw the CSG rise, but no compensation (the government says that the compensation is the suppression of the inhabitation tax… but as said above, it will only be fully effective in 2020). For a 1 500€ pension, the CSG rise costs ~25€ per month (-300€ per year).
- Millions of modest workers saw a small increase, but fairly insignificant and/or instantly eaten by the rise of other things.

Here are the results of some poll (14/02) regarding purchase power:

+ Show Spoiler [Poll on purchase power] +

All oppositions rushed into this “purchase power” theme, both at the left and the right, to criticize the government.

The government is introducing selection at the university (while claiming that it's not the case). Theoretically, before, when you had the baccalauréat [national diploma after you complete high scool] you could go to the university of your choice. Now no more; universities will get to select their students based on criterias of their choice.

The right had tried to introduce selection in 1986, but they had been forced to withdraw the reform after protests. One student, Malik Oussekine, had died at the hands of some violent cops after a demonstration. The minister, Devaquet, had resigned. Dark irony of the universe, he died in January, right when the current government was introducing selection like him 32 years ago…

The government used the fiasco of the orientations last summer (the system was bottled, some students had no answer until very late) to act. A few university streams were also saturated, so random draws (!) decided who was in and who remained out. Obviously having your future being decided by roll dice was unacceptable, so the government took this pretext to change everything (the government also argued that “there's too much failure in the first year of university”). The previous platform of orientation, APB, was scapegoated and replaced with ParcoursSup; but it seems that the new platform is even worse and more opaque, and will end up being a bureaucratic mess. The new system also adds an extra charge of work, but of course universities did not get any extra means to handle it.

And last but not least, the reform is being applied even before its final adoption (which sounds completely anticonstitutional, but eh…).

The French university suffers from under-funding, and there are simply not enough places for the number of students (we had a peak of births in the early 2000's). But building new universities is too trivial, and it costs money best spent on billionaires, so it's better to decrease the number of students with selection…

+ Show Spoiler +

There has been demonstrations last month against selection, with some universities being blocked during days of protests, but it remained under control so far.

Simultaneousely, there is an ongoing reform of the baccalauréat, which will weaken its national status: continuous control will now count for 40% of the results, so the diploma will likely have a different value based on the standards of each establishment. The hidden interest is also budgetary: with the reform, there will be less hours, so fewer teachers will be needed… Ideal when you want to cut 120k jobs of public servants. No such thing as small profit!

Those two reforms go hand-in-hand to form an educational projet of organized shortage, increased concurrence and social reproduction—no need to precise whose children will be the winners and the losers after those changes are implemented. They will make our already elitist and unequal system even worse. Macron is burying school democratization.

On January 30, there was a national strike in the EHPAD (retirement homes with medical services) for the first time; there had been a lot of scattered strikes the previous year but no common movement. All trade unions, associations of pensioners and even the directors supported it. There is a general lack of means in the sector (and the government wanted to reform funding in a dumb way, which would have favored the private sector over the public one), and caregivers themselves talk of “institutional abuse” because they don't have enough time to properly deal with each patient.

They demand job creations to have decent caretakers/patients ratios (currently this ratio is 0.6:1, they ask for 1:1). Many caretakers are near burn-out territory, and there is a general unease in the profession due to the cadences, work accidents and the impossibility to do their job properly. According to official numbers, the mobilization rate for the day of strike was 32%, which is quite a lot.

The Minister of Health, some cold-hearted technocrat, answered concerns with a bunch of PR and did mostly nothing. The government promised 50 extra millions of euros, but that's only like 8 600€ per establishment, i.e. probably enough to hire 0.3 extra caretaker per nursing home… Trade unions found the sum derisory, and called for a new day of strike the 15/03 (same day as pensioners who protest against the CSG rise).

Hospitals face the same problems: underfunding, not enough staff, etc. Austerity and the pressure for profitability had disastrous effects on the public service. A few public tribunes raised the alarm bell regarding the state of the French health system.

The government promised to launch a global reform before this summer. Its main communication element, so far, is that “30% of medical acts are useless”. Very promising…

A first day of strike had occurred on October 10 last year, gathering all trade unions. They were protesting against Macron's plan to cut 120k jobs, frozen wages, and the reintroduction of the jour de carence (when you're sick and take days off, you're not paid the first day; the pretext is to lower abstenteeism).

The government unveiled some its plans for the public sector in February: merit pay, contractualization (using very precarious people instead of hiring people for life…), merging staff representative structures and a voluntary departure plan to meet the goal of cutting 120k jobs. Macron has the very status of public servants in focus; he would probably love to terminate things such as lifetime employment, and overall wants to reduce costs on top of managing the public sector like the private one (he also wants to reduce the perimeter of the public sector). The government announced “one year of negotiations” to reform the public sector and should make more precise announcements in April. The three most combative trade unions denounced “fake negotiations” and boycott them so far.

7 out of 9 trade unions called for a day of strike the 22/03 to protest against all of this.

The highly symbolic dossier. On February 15, the Spinetta report—a series of recommendations by a former Air France boss to reform the SNCF—was published. The SNCF is our national state-owned railway company.

For the background, some major dysfunctions (no trains for hours in Paris because of technical issues) had received huge media attention in the last year, so the scene had already been set for some drama.

The government was to announce on February 26 the final decisions that they would make, following or not what the Spinetta report advised. One week before, the government's spokesman said that they were considering using executive orders (ordonnances) to pass the reform faster (they want it done before summer). Trade unions, who were already mad at Spinetta's recommendations, warned that this would be a casus belli.

Among others, the Spinetta report was advocating:

(1) Changing the legal status of the SNCF (opens the door to privatization in the future)
(2) Closing 9 000 kilometers (30% of the current network) of “small lines”
(3) End of the special status of railway workers (the current ones would not lose it, but new people would be hired with a standard work contract, less advantageous)
(4) End of their special pension scheme
(5) Accelerating the opening to concurrence (already asked by the EU)
(6) A plan of voluntary departures

Earlier this week, the government confirmed that they would use executive orders because “the matter is urgent” (apparently, the 9 millions of poor or people dying in the streets can wait, but not the SNCF). This has been interpreted as “cry havoc and let slip the dogs of wars” by trade unions, who are adamantly against further liberalization, don't want privatization and consider that the special status of railway workers is the compensation for the harshness of the job (flexible hours, night work, etc.) and goes along with the status of public service. All parties in the opposition criticized the use of executive orders, whether they are for (the right) or against the reform (the left, and partly the far-right).

The following 4 trade unions are representative at the SNCF (results from the 2015 elections):

(1) The CGT won with 34,3%
(2) The UNSA was second with 23,9%
(3) Sud-Rail arrived third with 16,8%
(4) CFDT got 15,2%

To situate things, from the most combative to the most compliant, let us say that the CGT is left, Sud-Rail is far-left, while the two other trade unions are rather “centrist”. But this time they're all united against the government's project, and quite mad. The CFDT, the most “moderate” of all four, even suggested a renewable strike as soon as possible, before the 22/03 strike that was called by the CGT and Sud-Rail. There are elections at the end of the year: perhaps it explains this renewed verbal “radicality”… That, and the unprecedented attack on the public service and their rights.

The Prime minister, who uses the most authoritarian method possible with executive orders (= unilateral decisions from the executive after a parody of parliamentarian debate), said that he uses decrees to “allow for dialogue”. War is Peace, Freedom is Slavery, Ignorance is Strength. He said that the SNCF debt (46 billions of euros) was worrying, and that “people are paying more and more for a public service that works less and less”.

Strategically and wisely, the government dropped Spinetta's proposal to shut down small lines in rural areas. They knew that this decision would be wayyy too impopular, especially as Macron is seen as “the president of metropolises” (plus the right-wing opposition makes its speciality to “defend rurality”), and that local representatives would be mad. So the Prime minister said, “we're not going to close 9 000 kilometers from Paris”. Instead, he will let regions do the dirty job. Since they're financially asphyxiated and they will be the ones in charge of those small lines, it isn't hard to figure what will happen to those non-profitable lines…

The government also dodged a bit the debt issue—Spinetta was proposing for the State to take it back; said debt is due to political decisions and disastrous public-private partnerships to build high speed lines connecting Paris to other metropolises in province—and delayed the question of pensions. Instead, they focus on the status of railway workers. They indeed have a few advantages, back from when the company needed to attract workers: they can't be laid off for economic reasons, they can retire earlier + Show Spoiler + and got a few other small advantages.

The day after those announcements, the SNCF's 2017 results were published: sales revenue increased (+4%) and the net benefit was multiplied by 2,3 to reach 1,3 billion. Ups! So much for the alarmist storytelling…

Despite martial declarations from trade unions (the CGT promised “one month of strike to make the government back down,” another warned that this could be the “harshest conflict in the history of the SNCF”), they agreed to participate to talks with the government and decided to wait the 14/03 to see the final project of executive orders (whose precise content is not known until it's published!). Then they will decide the 15/03 if they start a renewable strike or not. After the first reunion, trade unions said what everyone knows: that there are no real margins of discussion, the government already knows what he wants to do and will not deviate. Unsure if participating to those talks and awaiting is a tactival move from trade unions to appear open-minded after their warnings, or if they're just naïve/dumb.

The government's communication plan is going like this: they want to appear as the “courageous people who do what's necessary” to save the SNCF; they are the “modernist reformers” facing the “archaic/conservative trade unions” who “defend their unfair privileges”. Macron is, in fact, playing again Sarkozy's strategy in 2007-2010, when the attack on railway workers' pensions (workers were accused of being costly, selfish and privileged) had prepared the attack on the general scheme the later on. Macron wants to reform pensions too in 2019 (and change it to a points-based system).

He's also laying a trap by focusing the debate on the status of railway workers to zap the discussion on the public service railway (who will be turned into a profit-driven market) and territory planning; not to mention the ecological aberration that was the liberalization of rail-freight: now there are more trucks than ever conveying commodities on French roads. The government knows that special statutes are not popular in the opinion, after years of propaganda of portraying those who benefit from them as “privileged” who “are always on strike” and “take users hostage”.

According to Le Canard Enchaîné, Juppé [loser of the right-wing primary] declared: “The SNCF reform is the mother of all battles. If Macron succeeds, his road will be clear until the end of his term. The [right-wing] opposition will be forced to support him, because this is a reform the right has always dreamed about.”

I concur. Despite what the Prime minister said, even if they want to prepare the SNCF for the concurrence, there was no emergency; there are problems but the service is not collapsing. I suspect that Macron is pulling a Thatcher here, triggering a harsh conflict in front of everyone to emerge victorious and keep bulldozing. Like all right-wing brutes, Macron wants to defeat a working class stronghold. If one of the most combative sectors is defeated, then others will follow more easily.

Juppé also knows what he's talking about, since he got blocked by railway workers in 1995. Chirac had been elected on the “social fracture” theme, i.e. he had promised to tackle social inequalities (or so the opinion had understood it…). Then he named Juppé as a Prime minister, who launched an austerity plan (among others to obey to Maastricht's criterias… already the EU). Protests occurred, several weeks of strikes paralyzed Paris (railway workers thus played a key role) and Juppé was forced to withdraw his retirement reform.

The 1995 strikes were considered as the reawakening of the social movement (which had been fairly lethargic under Mitterrand), and contributed to the win of the left when Chirac dissolved the Assemblée in 1997. To this day, Juppé still has it somewhat bitter when he evokes 1995. Ironically, the current Prime minister is Juppé's protégé, and Macron is pretty much Juppé's younger self.

The memory of the 1995 strikes was not lost on the other side either. Some Twitter account of the CGT Railway Workers wrote: “With the executive orders, the government is declaring war upon us. We blew up Juppé in 1995, we'll blow up Philippe in 2018.” (Philippe is our Prime minister.)

Winning the battle of the opinion will be the recipe for success for both sides. In 1995, the public sector and railway workers were a bit like, you know, the heralds of the people who were angered at Chirac betraying his promises. In 2018, we will see if the strikes manage to resonate with the latent anger in the country at Macron's policies, and in particular his many attacks on the public service.

So far, Macron's party lost in all elections. In September, they got far less senators than what they expected (somewhat normal given the voting method, but still); in 3 municipales, they did not even reach the second round; and they lost both législatives partielles last month (link above). For the two coming elections:

The 973-02 (which is an Overseas territory, in Guyane) election was very close in June 2017: the macronist won with only 57 votes (out of 12k votes) more than his challenger, a trade unionist marked as “left-wing regionalist” who had been a local figure of the 2017 social movement in Guyane. What changes with the reelection is that this guy is now supported by the FI (the main left-wing force, consistently considered the main opponent according to polls), and will join their group if he wins. Mélenchon had arrived first in the présidentielle in Guyane, with 24,72% of the votes (+5 points compared with the national average). Should the same duel occur in the second round, there is a decent chance that the FI gets a 18th député by beating a macronist, which would be considered a bad omen for the government and a contrario, an excellent symbol for the opposing left.

+ Show Spoiler +

The 31-08 district is interesting because it's historically a left-wing constituency. The PS holds it without interruption since 1988 (the district was created in 1986). In 2012, the PS candidate even won right away in the first round with 51,6% of the votes. And when the PS lost 90% of its députés following Macron's election, the 31-08 elected one of the 30 PS survivors, winning with 91 more votes than his macronist rival (over 34k expressed votes).

Bad luck, the election was cancelled… and now the perspective of the reelection seems very uncertain for the former PS winner. In June 2017, he was “only” 1 600 votes ahead of the FI candidate out of 43.5k expressed votes; so if PS voters desert, or some switch to the FI, there is a possibility that he doesn't even reach the second round.

+ Show Spoiler +

Mélenchon is taking very seriously those elections; he held a meeting in the 31-08, and is spending a whole week in the 973-02, even staying there until the results of the first round are announced. During the meeting, he said that he's hoping for a “thunderclap” in those “popular lands”.

On paper both districts look winnable for the FI, but they might run into the wall of differential abstention (the FI electorate is, among others, composed of lower classes and young people who demobilize far more easily), especially as the abstention in those by-elections can skyrocket to 70-80%, perhaps even 90% in Guyane…

At any rate, should Macron's party lose again those by-elections, it will make some noise.