Sunday, December 9, 2012

Arnaud Montebourg: France's love-hate relationship with 'the madman on the third floor'

He is the firebrand minister who told Indian industrialist Lakshmi Mittal that he was "not welcome in France". He is also the surprising new hero of the Left, as Anne-Elisabeth Moutet writes.
Arnaud Montebourg: France's love-hate relationship with 'the madman on the third floor'

In happier times: Audrey Pulvar announced her split with the minister via the media Photo: REX FEATURES

He is the grandly-named and grandstanding "minister for productive economic recovery" - an outcome which France, and Francois Hollande's struggling Socialist government, sorely needs.

But to say that all is not well with Arnaud Montebourg, a firebrand and populist left-winger who opposes most of the features of a modern economy, would be an understatement of equally grandiose proportions.

And the fact that this weekend he remains - just - in his post indicates the confusion at the heart of the French government.

Last weekend Montebourg, 50, had almost resigned; on Wednesday he was very nearly fired by Jean-Marc Ayrault, the prime minister, who gave him a sharp dressing down in front of group of goggle-eyed Socialist MPs.

Only the previous week, he'd been dumped by his high-profile girlfriend, Audrey Pulvar, a television personality who let him know by a text message she sent Agence France Presse.

Speculation on the beautiful Miss Pulvar's reasons for deciding to end their very public affair is rife, but everyone in France is well-aware of how Montebourg ended in the political doghouse.

A former crusading lawyer who built up popular support on the left of the Socialist party, and beyond, for his anti-corruption, anti-globalisation views, Montebourg drew international ire and national dismay for his response to industrial negotiations on the possible closure of the loss-making Lorraine steelworks at Florange.

He proclaimed that their owner, the Indian tycoon Lakshmi Mittal, was "not welcome in France" – where Mittal still employs some 20,000 people in many other locations.

 Coupled with a threat - now seemingly abandoned - of "temporary" nationalisation, in a style not unlike the General Motors bailout, of the Florange steelworks, this gave out a strong echo of the last time a Socialist government took over in France: more than 30 years ago, in 1981, when President François Mitterrand's Socialist-Communist cabinet decided to nationalise banks and large industrial corporations.

This is not the impression Hollande, and especially Ayrault (who happens to have a Mittal plant in his own Loire Atlantique constituency) want to make on the financial markets.

Until now they have kept lending to France at exceptionally reasonable rates - a smidgeon under 2 per cent for 10-year bonds, despite the recent downgrade from AAA-rating by Moody's that followed a similar move from Standard & Poors in January.

In the almost seven months since he took office, Hollande has acquired a reputation for economic shilly-shallying: hefty tax increases on business were almost immediately followed by tax breaks, for instance, while an announced 60 per cent capital gains tax for start-up entrepreneurs was rescinded after a few days of furious Tea-Party style Facebook campaigning by opponents. But so far this has not been punished internationally, even though it has translated domestically into the worst poll ratings of any president of the Fifth Republic since 1962.

Ayrault was of a mind to let Montebourg go, supported – even egged on – by Pierre Moscovici, the finance minister, who in theory is Montebourg's boss, but in practice has been frequently outshone by the figure referred to by many at the ministry's mammoth futuristic pile on rue de Bercy as "the madman on the third floor".

Their partnership is hardly a meeting of minds: Moscovici, a former European affairs minister under Lionel Jospin 10 years ago, is of a moderate Social-Democrat bent: pro-European integration, pro-business. Montebourg, by contrast, voted No in the 2005 referendum on the European constitution and would block the import of goods from countries without social welfare provision.

"Mosco" had loathed Montebourg's ideas from the start, but things rapidly became personal as well.

After the election, but before the finance team had moved into Bercy - the name by which the ministry is known - back in May, Moscovici was forced to adjudicate on territorial disputes caused by Montebourg.

The office of the finance minister himself is traditionally on the sixth floor. Montebourg tried to dislodge the budget minister, Jérôme Cahuzac, from the floor below, at the same time as attempting to appropriate the parking space in the courtyard assigned to the foreign trade secretary, Nicole Bricq.

In both cases Montebourg's machinations failed and he ended up, fuming, on the third floor, even further down the building than the minister for tourism and trade secretary, Sylvia Pinel. Tempers have only deteriorated over the following seven months, while the country's economic and political governance has given an impression of endless flip-flopping.

This may sound more like Big Brother on steroids than proper political disputes, but it's emblematic of the confusion reigning under François Hollande.

France's president made a lifelong career, as regional politician and party boss, of being a master of compromise, conciliating the Socialist Party's various "currents" by granting favours and advantages according to precisely-calibrated assessment of weight within Hollande's view of the ideal political balance at any given time.

Hollande is very much aware that a majority of his Socialist base likes Montebourg's flamboyance, even his gaffes – which they see as speaking truth to powerful interests. In the Mittal crisis, some polls found up to 63 per cent of French opinion supporting Montebourg's stance.

Unlike the German SDP or Britain's New Labour, the French Socialists have never formally renounced Marxist theory, and even the name "social democrat" remains a political insult in many quarters.

And this is before taking into account the sensibilities of the myriad parties to the left of the Socialists – the Greens, three small Trostkyite parties, the rump of the once-mighty French Communist Party, and a couple more tiny splinters – whose votes, added up, ensured Hollande's victory over Nicolas Sarkozy last May.

Because of France's first-past-the-post system, the Socialists enjoy in fact a clear majority in both houses of the French parliament, but still Hollande calculates as if hamstrung by a coalition, perhaps aware that he has to keep several currents within his own party from defecting to the militants on the Left.

His resulting indecisiveness is worsened by his own nature, as well as by his single previous experience close the presidency. He was a junior aide to François Mitterrand in the 1980s, and learned much from the wily old politico - who always arrived late everywhere and famously believed that you should "give time to time". In other words, wait and see how a situation would decant.

It worked for an autocrat like Mitterrand, born in 1916, and who viewed the telephone as a cutting-edge technological device. It is far less effective in Twitter time, in a man whom neither best friend nor worst foe would ever think of calling an autocrat.

And so when Montebourg spoke of "nationalisation", Hollande crucially stayed silent for five days, even inviting the troublesome junior minister to the Elysée to assure him, Montebourg afterwards said, that "nationalising the Florange steelworks until a credible buyer [was] found" was "still a possibility".

Hollande staved off Montebourg's resignation, seemingly only to let his prime minister threaten him with the sack four days later.

Hollande had his reasons – Montebourg increasingly appears to Lakshmi Mittal as the pitbull the president releases when his concessions are seen as just not good enough – but such tactics carry their own risk.

Emboldened by Montebourg's stance, and a militant political vocabulary unheard from a cabinet minister for decades, enough Socialist defectors voted with the Communist group in the Senate to defeat the Budget and the bill funding France's state health and pensions systems last week.

This was only a warning shot: both bills will now be amended, and are likely to pass the next time they return to the upper house. But the impression of weakness remains - even as most of Hollande's campaign promises, including new civil service jobs, lowering the retirement age and more teachers, go unfulfilled.

Meanwhile Montebourg is fuming at his treatment by Hollande and Ayrault, but upbeat in one respect: amid all the publicity he has become a hero for the Left.

When he stood in the last Socialist Party primary elections for a presidential candidate, he received just 17 per cent of the vote. If Hollande's government goes on giving the impression that no-one is really at the helm, the inevitable clamour for change next time may mean there's a demand for even more grandiose promises.

In the strange world of the French Left, Montebourg may consider his own prospects of becoming president himself have just risen, from impossible to merely improbable.

© Telegraph Media Group & Anne-Elisabeth Moutet, 2012

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