The New Political Economy ofDirigisme: French Macroeconomic Policy, Unrepentant Sinning and the Stability and Growth Pact

Abstract

This article traces the enduring influence of the dirigiste traditions on contemporary French macroeconomic policymaking, arguing that French policy both within and towards the Stability and Growth Pact (SGP) is consistent with long-standing French dirigiste preferences and policy traditions. Specifically it explores how, within the SGP, French governments have created and defended significant fiscal policy space, and how the scope for discretionary policy-making has in fact been enhanced by the credibility accrued through European rule-based governance. Furthermore, it analyses how, in their policies towards the SGP, French governments have successfully influenced the reshaping of the fiscal policy architecture, introducing a more dirigiste interventionism in the interpretation and implementation of the SGP, loosening constraints in accordance with dirigiste preferences. French policymakers have thus played a 'long-run game' with European economic governance -initially accepting ordo-liberal orthodoxy, only to subsequently 'move the goalposts' in a more dirigiste direction. protector of the public sector, and as a strategic actor (Dyson 1980, 95-7; Schmidt 1996, 73-93; Schmidt 1997, 229). What flowed from this model was a presumption on the part The New Political Economy of Dirigisme After setting out French dirigiste preferences with regard to SGP reform, this article briefly assesses enduring volontarisme in French fiscal policy-making, interpreted here as evidence of enduring dirigiste interventionist preferences and capabilities amongst policymakers. It then explores intentional re-engineering of the supra-national fiscal policy framework of the euro in order both to expand domestic room to manoeuvre, but also as an attempt to re-articulate dirigiste policy approaches at the supra-national level.

Post-democracy and institutionalized austerity in France: budgetary politics during François Hollande’s presidency

“…As demonstrated in the previous sections, radical reform of EMU has had a profound impact on budgetary politics by institutionalizing fiscal consolidation and structural reform even in the case of France, which had a record of skirting the budgetary rules of the SGP in an unrepentant fashion (Clift 2006). French presidents have approached the politics of retrenchment with an eye on electoral considerations (Bezes and Le Lidec 2015), while also supporting institutional momentum for developing tools of macroeconomic government at the Eurozone level even if their German counterparts have insisted on creating binding fiscal rules as a precondition.…”

“…Post-democracy is a potent way to explain the appeal of anti-system parties in the West precisely because they can present themselves as offering the only genuine alternative to cartel parties of both the centre-left and the centre-right that have fused with the state apparatus and supposedly ignore popular concerns over the economy and society (Richards and Smith 2015). France is an ideal test case for understanding the impact of Eurozone post-democracy not just because of the established presence of the populist Front National, but also because it has a record of ignoring EMU fiscal rules (Clift 2006) and of using its influence to avoid the accompanying sanctions (Heipertz and Verdun 2010).…”

Britain and the Crisis of the European Union

“…The popular belief that French economic preferences naturally cluster around state planning (dirigisme) centred on control of key industries including transportation, energy and telecommunications, with state incentives to banks and private corporations to merge or undertake strategic projects, ignores the evidence that leading French politicians and officials played a vital role in the neoliberalisation of the EU and EZ (Schmidt 2008b, Clift 2006. Mitterrand's Socialist administration, elected in 1981, began by attempting to regulate capital flows, along with sweeping statist economic reforms, but under pressure from global markets affected a U-turn from 1983 onwards with the tournant de la rigueur (austerity turn) in which the fight against inflation was prioritised, partly to remain competitive in the EMS and partly to appease speculators against the Franc.…”

The political economy of French social democratic economic policy autonomy, 1997–2002

“…This was part of a wider strategy, or 'long game' -to use the credibility gained through competitive disinfl ation, and thereafter a strongly German infl uenced architecture of EMU, to expand their room to manoeuvre in economic policy. Subsequently, once credibility had been achieved, French Socialists sought to rewrite and reinterpret the rules (Clift 2003b and2006).…”