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  1. Wealth
May 11, 2012

Francois Hollande's luck

By Spear's

Hollande wants to blow up the FiskalPakt as though it was old ordnance left over from the last German conquest of Europe’s economy

The EU is an economic mess that has now descended into a political morass: Monsieur Hollande wants to renegotiate last month’s German-inspired FiskalPakt, but standing in his way is Hausfrau Merkel, appearing on Sky in a green dress looking as though it was cut by a Black Forest tent-maker with an ugly fold that defied the iron – “Such a difficult colour, green!” – looking for all the world like one of those green hydraulic traffic-stoppers that pop up when the autobahn is cut off to incoming traffic after a bad pile-up.

Hollande, dubbed ‘Flanby’ by the French press after one of those mass-produced milk-puddings that can’t stop wobbling as you top it out of its polystyrene cup onto the plate, has had enough teutonic austerity; he wants to blow up the FiskalPakt as though it was old ordnance left over from the last German conquest of Europe’s economy, as in Now. The idea that the green hydraulic ram is about to roll over to the pudding is wishful thinking at its floppiest, but Flanby’s problem is that he has no Plan B.

As he enters the Elysée Palace on 15 May and reaches for the levers of power, the one marked Banque de France would have grabbed his attention in days gone by, but these days it is not connected to anything he controls, so no QE or fiscal easing there. Next La Trésorie Nationale lever might have caught his attention, but these days the wires have long been cut, so no Frndevaluation prospects there. Now the centime drops! “I am president of the 5th Republic without a currency and little control over its own economy! Aaaagh!”

As a good socialist, there is only one remedy available – soak the rich! Grease up the fiscal guillotine and raise taxes to 75%! Needless to say, at the sight of this old guillotine being redeployed, the rich head for Switzerland and London. And the only French winner I can think of is Monsieur Arsène Wenger, the manager of the Arsenal in London, as he swoops on the best footballers in France who don’t want to pay 75% tax on their absurd wages, as he restocks his depleted midfield. And what’s good for footballers is good for bankers, doctors, scientists and all the other French rock’n’roll highfliers.

Flanby – who was also likened to the captain of a Pedalo boat by an election rival – isn’t all at sea on his own, however: Plans G and H are providentially right there with him, namely Greece and, surprisingly, Holland. The Greeks are further round the EMU-bend of the Eurinal than anyone else, and now have had enough austerity and bail-outs and will go quietly if everyone else writes off their debts for them, while the Dutch are just becoming aware of an uncontrollable sucking sensation around their ankles and are uncomfortable.

Perhaps all Flanby needs is a large explosion emanating from the other side of the Pyrenees and he could be looking good, if he uses France’s undoubted clout to lead the charge back to sanity, namely the end of EMU, at least for France and the PIGS. Where all the losses end up is anyone’s guess, but it will be a triumph for democracy over unelected bureaucracy, which was always the critical flaw at the heart of the Maastricht Treaty. Otherwise, the late Rt. Hon. Nicholas Ridley’s prediction that the “Maastricht treaty is just a German racket to take over the whole of Europe without firing a shot” will begin to look increasingly like Europe’s future.

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