What’s up with France?

Last month, Standard & Poor downgraded France’s credit rating. The reasons for this are interesting. France is less indebted than Britain and has consistently done better. The IMF even expects this advantage to widen a bit. So why the downgrade? Because, S&P says, France hasn’t carried out ‘reforms that will enhance its medium-term growth prospects.’

What exactly are these reforms? Good question. They are in fact a shift towards the free market. The IMF is ruffled because François Hollande is raising taxes on the wealthy while preserving France’s welfare state as best he can. That is a serious step out of line. Getting money from the rich rather than slashing the safety net goes against all ruling orthodoxy.

The downgrading of France makes it very clear that the austerity drive has never been about fiscal responsibility. Its main concern has been to ensure the continued use of international economics as a profit mechanism. M. Hollande has been an obstinate laggard in this respect, so he is getting a slap on the wrist. Zut, alors.

The French Constitutional Council has just agreed with the new socialist government that it’s totally legal to raise the very top income tax rates on very wealthy individuals and hugely profitable corporations to 50 percent. Can this set a precedent? Over Westminster’s dead body, we feel.