Bang goes the Government

This morning, the Elysee Palace announced that the President had asked the Prime Minister to form a new Government.  The Government has resigned and the political classes, back from holiday as the country gears up for the rentrée, have been thrown into the white heat of a political and Constitutional crisis.  By the end of the week, France will either have a new Social-Democratic cabinet and parliamentary majority, or the Socialists will have fallen, precipitating legislative elections and likely a new Conservative Government with a thumping majority behind it.

How, in the space of one weekend, have the summer months been swept away leaving bare the divisions within the Socialist party, risking the very existence of the government?

Lighting the fuse

It is unlikely that when Arnaud Montebourg, the flamboyant Minister for the Economy, made a series of speeches this weekend in his regional fief in Bourg-en-Bresse, he anticipated bringing about a fullscale reshuffle.  Montebourg, who, as we have seen, has a history of walking the line between collective cabinet responsibility and being a rogue agent for a new modernist, anti-globalisation left, has a galloping ego to the extent that his annual Fête de la Rose political gathering acts largely as a hommage to his own unique speaking style, has rather enjoyed being a Minister.  Bright, charismatic, but never knowing when to restrain himself (he famously described Segolene Royal’s only defect as being her then partner, François Hollande, in the 2007 Presidential campaign), Montebourg came third in the Socialist Primaries in 2011 and, plumping for Hollande over his more natural ideological bedfellow, Martine Aubry, he probably tipped the balance in Hollande’s favour.

His reward (although some have suggested it was more a punishment) was the Ministry of the “Productive Recovery”.  This somewhat Orwellian-sounding department (actually the Industry Department) had a mandate to intervene to fund small businesses and increase exports.  Montebourg has been effective in bringing “buy French” campaigns to the fore, but has largely failed to bring about bigger changes such as deregulation of closed sectors of the economy, although he has announced with much fanfare the desire to do so.

Having railed against European Commission imposed “austerity”, and the German economic consensus, Montebourg spoke repeatedly this weekend about the need for change.  When it was pointed out that as a Minister in government, he seemed ideally placed to bring about this change, he explained that he was in government to argue for change from the inside.

Stand Well Back…

The Prime Minister, Manuel Valls, didn’t see it that way.  Already on Sunday evening, as dark clouds swirled over the Prime Minister’s residence, Matignon, aides announced that Montebourg had crossed a line.  

Few expected such a dramatic result.  This morning the Minister for State Reform was downplaying the dispute on a popular morning radio programme, claiming that the substance of what Montebourg said was less at odds with the President’s policy, that it appeared but conceding that Montebourg had damaged the cabinet’s collective responsibility.

Rather than continue to paper over the cracks, instead Hollande and Valls have decided to rip open the wound.  What happens now is crucial.  Valls will form a new government, remaining as Prime Minister.  It is unlikely to include Montebourg, who will give a speech this afternoon from his now former Ministry, presumably to give his side of the story.  Benoit Hamon, Education Minister, who was Montebourg’s sidekick this past weekend and who also voiced his support for Montebourg’s position, may be spared as a sop to the left of the party.

Collateral damage

The next step is however crucial – the Prime Minister is likely to present his new government to the National Assembly who vote its confidence.  This is not an obligation, and in the past whole legislatures have passed without a new Government being approved by the Assembly, but if Valls does not face Parliament, he would be the first Prime Minister since 1993, and would certainly be pilloried by the opposition and probably his own party.  The President’s communiqué states clearly that the new government should follow the President’s current policy line – a veiled reference to the Responsibility Pact.  If Valls puts forward a squarely social-democrat government to implement the Pact, he may not have a majority of the Socialist MPs to support him.  If he falls, Hollande would have to dissolve the National Assembly, and the Socialists would certainly lose an election – and lose badly.  Hollande would be forced cohabit with a Conservative majority, government and Prime Minister.

Hollande and Valls are gambling once again.  The Responsibility Pact itself is a gamble – that the Socialists will swallow supply side economics and that reducing employers’ costs will produce more jobs.  Valls as Prime Minister is a gamble – that he can control the more rebellious elements of the party with his hard line style and avowed centrist views.  This morning they gambled that the 295 Socialist and associated MPs in the National Assembly prefer having a pinkish government – albeit one that some of them rail against on a daily basis – rather than the hard right they would get if they threw Valls out.

If Marie-Noelle Lienemann, a leading light of the hard left, is an indicator of the present mood of the group of frondeurs (trouble-makers), the outcome of that decision is by no means clear.

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