France: “No to Permanent Austerity. Reject the Budgetary Pact – Open Up the Debate in Europe!”

Towards a Large Unified Demonstration in Paris on Sunday, 30 September

The President of the Republic would like to have the Parliament ratify as quickly as possible the Treaty on Stability, Coordination and Governance (TSCG) of the Eurozone, better known by the name “Budgetary Pact”, which was signed by Nicolas Sarkozy on 25 March. However, the feeble “growth” measures announced on 29 May in no way constitute the “renegotiation” promised during the electoral campaign by François Hollande, which “adds austerity to austerity”.

This Budgetary Pact will aggravate the neoliberal policies advocated for years now and which have led to the current problems of the Eurozone. It is, in the first place, an economic absurdity. By stipulating that the “structural deficit” of a country has to be less than 0.5 % it will oblige the states to make drastic cuts in public expenditures. It will deprive public power of indispensable means for carrying out policies allowing a social and ecological transition. Instead of this, we need to develop and renew public services and social protection to respond to the many unmet needs, reduce social inequities and establish equality between women and men. We need considerable public investments to finance energy transition, reduce pollution, ensure the ecological conversion of the modes of production and consumption and create millions of jobs. An obligation to achieve permanent balanced budgets will be a major restraint on attacking the social and ecological crisis.

In a Europe in which the customers of one country are the suppliers of the other, the orientation begun two years ago is today leading to generalised recession. The difficulties with PSA (The Peugeot-Citroën group) and other companies flow directly from the collapse of demand in southern Europe. Today purchasing power is stagnating or declining and enterprises and local governments are reducing their investments: In this context, cutting public expenditures can only aggravate unemployment. Starting in 2013, according to a study undertaken by the IMF itself, bringing France’s deficit in line with the target of 3 % of GDP announced by the government will automatically create 300,000 more unemployed workers. The resultant reduction of tax revenues will make reducing debt – the alleged purpose of austerity – still more difficult, thus “justifying” a new turn of the screw.

Economically stupid, this Budgetary Pact is socially unbearable, seeing as the “structural adjustment programmes” currently imposed on Greece and other countries in difficulty reduce social protections, increase illegal practices and most badly hit the precarious populations – women, youth, workers and immigrants. Far from protecting northern European countries from suffering the same fate as those in the south, this Pact drags the whole Union into a depressive spiral that threatens to spread poverty. This would mean a decline without precedent in the entire period after World War II.

Finally, this Budgetary Pact represents a denial of democracy. Not only does it provide for quasi automatic sanctions in the case of non-adherence, but it marginalises the national and European parliaments and makes of the Commission and the European Court of Justice – non-elected organs – the judges of national budgets. It puts in place an authoritarian federalism that negates popular sovereignty. It puts the economy on automatic pilot, subordinated to norms intended to reassure the financial markets whose power is not challenged.  We do not accept this.

The social, ecological and financial world crises are worsening. They present many dangers, which can be seen in the growing strength of extreme xenophobic and nationalist right groups. These crises require a Europe-wide mobilisation but in a Europe based on solidarity and democracy, a Europe that frees itself from the grip of the financial markets. However, the Budgetary Pact will instead reinforce the contradictions within the Eurozone and could lead to its disintegration. France’s refusal to ratify this treaty would be a strong signal to send to the other peoples of Europe to open up the discussion on constructing another Europe.

This is why we, the signatory organisations of this text, reject this Budgetary Pact that concerns everyone’s future. We demand that a broad democratic debate be initiated in order that citizens may take possession of this decisive issue and speak out on it. We want to make the President of the Republic, his government and the parliamentarians face their responsibilities.

To create this democratic debate, we call for the strengthening of already extant local collective structures – notably those involved in a citizen’s audit of the public debt –, and for the creation of new structures if need be; together, we will organise a series of public debates throughout France; we will speak to every deputy and senator of the parliamentary majority and invite citizens to do the same, and we will organise demonstrations, including a large unified demonstration in Paris on Sunday, 30 September. An organisational committee has already been put in place to assure the success of these initiatives.


Further information:

First signatories