Could Renzi save Hollande?

Hollande is less than two years into his five year term, but he already looks tired, a busted flush. Italy's Renzi just might be able to save him

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Renzi and Hollande
Timwork
Tim Hedges
On 23 March 2014 11:46

The pattern for western democracy is that political leaders make a raft of promises before elections and, provided the electorate hasn’t found them out in advance, keep them with varying degrees of enthusiasm and success. The voters feebly try to hold their new masters to account but usually have to wait for five years before passing judgment.

For Matteo Renzi it has been different, in part because he hasn’t been elected, except as leader of his own party, and the caucuses of the Partito Democratico are beginning to regret even that.

Elections will come, but for Renzi this period amounts to a honeymoon, where he can do no wrong. He has blackmailed the political class and the people, such that he can say ‘You may not like everything I am doing, but I am fresh and new. Do you want to go back to the old days, with Bersani and the communist d’Alema? Back to Berlusconi?’ They don’t.

Second, it amounts to a Purgatory, where he is able to prepare for office by clearing out the baggage of the past. Few politicians have had the opportunity to change the electoral process prior to having been elected. This change will produce a two party system, and Renzi knows that his opposition will be a convicted criminal nearly twice his age.

Things are looking good.

Lastly this period is a novitiate for Renzi, where he can make mistakes and build alliances without fear of being replaced (it would have to be with yet another unelected leader, which won’t happen).

Despite this Goldilocks scenario, Renzi has not been shy about making promises. He has undertaken to deliver a reform a month, and his first one is a budget for jobs, which he calls the Jobs Act. For this, which will inevitably involve some financial pump priming, he has to have friends in Europe.

He has done the usual circuit of European leaders, the most important being, of course to Angel Merkel, the long serving leader of the most powerful country, who is now effectively Monarch of Europe, the new Habsburg Emperor. And the blessing came from Willy Brandt Strasse. Merkel pronounced herself ‘struck’ by Renzi’s plans: ‘Italy is changing’ she said. It would be hard to come away with a better mark on your homework.

But it may well be that the more significant trip was to see François Hollande in Paris.

Hollande is less than two years into his five year term, but he already looks tired, a busted flush. Some say his best hope of being re-elected in 2017 is if Nicolas Sarkozy is prevented from returning to politics following a corruption allegation; but it is a false hope. There are others waiting to replace him, and nobody seriously expects a second term.

Hollande is the only president to be less popular than Sarkozy. With local mayoral elections this week and European elections in May, his misery is likely to be complete.

Enter Matteo Renzi.

Hollande came to power promising to revive France’s moribund economy by government spending. He promised to ignore spending constraints and form an alliance of countries to oppose the unpopular German diktat of financial rigour. Of course he failed.

It is impossible to know how hard Hollande tried with this, but it was doomed from the start. Mario Monti and Enrico Letta in Italy were too pro-European to join the struggle, and at the time Mariano Rajoy in Spain was too scared. The plan never got off the ground and Hollande’s unpopularity in his own country was confounded by having lost a battle with Wolfgang Schaeuble, Merkel’s finance minister.

The irony is that as the recession kept France’s GDP depressed, the deficit became larger and larger. It is estimated that France’s deficit will now be over 4 percent for the next few years, against the 3 percent limit imposed by Brussels. France has breached the deficit without really doing anything; Hollande has got his will without generating any benefit to his people.

But could the time be right for another assault on budget deficit limits? A little leeway could save Hollande, empower Renzi and Italy and be a lifeline for the European periphery. Hollande would just need to stand up to Wolfgang Schaeuble, with the help of Renzi, and persuade him to look the other way for a few years. He can point to the threat of Marine Le Pen’s Front National if he fails.

That meeting with Renzi might turn out to have been very important indeed.

Tim Hedges, The Commentator's Italy Correspondent, had a career in corporate finance before moving to Rome where he works as a freelance writer, novelist, and farmer. You can read more of his articles about Italy here

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