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The price of Sarkozy’s gamble (incl. VAT)
By Gilles Ivaldi
18 January 2012 | Policy | 854 words
The presidential campaign has undoubtedly taken a decisive turn after the announcement by Sarkozy of his intention to raise VAT in order to bolster competitiveness of France’s economy. With a rather questionable reference to a similar reform conducted by the German government in 2007, the idea behind the proposal is to transfer some of the financial burden of social welfare contributions from companies to domestic consumption and imported products. After the budget-cutting efforts of 2011, this would be the cornerstone to the “new stage” in the government action to boost sluggish economic growth and put a halt to the deterioration of the French labour market.

This clearly is a very risky political gamble by Sarkozy just three months ahead of the first round of the presidential election. Let us remember that the creation of this so-called “TVA sociale” had been momentarily envisaged in 2007 and had in fact provided the socialist opposition with a powerful argument during the legislative campaign of June, forcing the government to backpedal in haste and confusion. It is often said that this unforgivable political blunder had cost the UMP majority a few parliamentary seats.

Signs that the plan could once again backfire on its instigators are visible. After the brief upturn of the post-G20 period, Sarkozy’s popularity seems now to be plunging, well on the way to reaching another historic nadir that would further complicate his re-election bid in the spring. The same polls show that presidential outsiders may be the true beneficiaries from what could well end up as yet another political fiasco for the centre-right majority: François Bayrou is slowly gaining support amongst right-wing voters and now has much brighter prospects of repeating his performance of 2007. As for populist candidates on both sides of the spectrum –they are probably rubbing their hands and looking forward to the social turmoil that will undoubtedly arise from the proposed increase in VAT. Recent polls show Marine Le Pen on the rise after months of relatively static numbers. Considering the intense demagogic campaigns by the FN on the prices of vital commodities, electricity and petrol since the 2010 regional elections, this surge in popularity is hardly a surprise.

The VAT plan is fiercely opposed by all trade unions with the notable exception of MEDEF (the business organisation) who has been a proponent of a VAT raise for many years now. All parties of the left-wing opposition, Bayrou’s MODEM and the Front national are also against the proposal. Perhaps more alarming for Sarkozy, the strategy is meeting with resistance from within the ranks of the UMP parliamentary party, in particular from a number of members of the Droite Populaire. Hard-line backbenchers Christian Vanneste and Lionnel Luca have already publicly expressed their doubts about this “hardly understandable and highly unpopular measure” that will fuel the discontent in vast swathes of already disgruntled working-class and lower-salariat voters.

So, political gambling it is. And a critical juncture in the campaign as the presidential-candidate-to-be seems ready to stake his all on this last set of structural reforms. The Elysée spin-doctors appear to have formulated a new political strategy for the final run up to the first round: the all-out offensive mixing fiscal responsibility, budgetary orthodoxy, a pinch of electoral demagoguery and a small dose of triangulation (the Tobin tax) to put the socialist opposition in a quandary, while further building Sarkozy’s image of high calibre statesman, energetic -restless?- leader and daring captain in the raging storm.

This strategy of ‘tous-azimuts’ rests on two very questionable assumptions. First, that the depth of the current financial, economic and social crisis is such that voters will be wary of political adventure or turn away from allegedly inexperienced opposition candidates when the time comes to make a final decision. Second, that once taken in the whirlwind of end-of-mandate reforms, the now dissatisfied voter will project themselves into the future and fail to remember that Sarkozy was once one of the most unpopular leaders in Europe.

On the first of these postulates, the experience of recent elections across the continent tends to demonstrate that voters can show ungratefulness to those who have been at the helm during the tempest. Already, the debt crisis has caused a growing backlash from voters towards their incumbents across a number of European countries such as Ireland, Portugal, the Netherlands or Spain. Had Berlusconi faced the verdict of the ballot box in Italy, it is likely that he would have met with a similar fate. In this, the strategy of ‘tous-azimuts’ might prove at the best presumptuous.

As for the second working hypothesis of Sarkozy’s political advisers, the trouble is that decades of electoral research point, amongst many fascinating elements, to a few remarkable facts:

- voters are myopic and have a short time horizon;
- they react both to past and expected events (they tend to be slightly more retrospective than prospective in many cases);
- more importantly, their grievance is asymmetrical: voters react more to negative changes than to corresponding positive ones.

Political gambling it is, most certainly.

Post-scriptum: many thanks to Jocelyn for suggesting the title of this entry.

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Welcome to '500Signatures', for analysis and commentary on French politics and elections

This blog is produced by Jocelyn Evans (University of Leeds) and Gilles Ivaldi (University of Nice)

 
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since 10 January 2012

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ABOUT THE AUTHORS

Jocelyn Evans [@JocelynAJEvans] is Professor of Politics at the University of Leeds

Gilles Ivaldi is a CNRS researcher in political science based at the University of Nice

 
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CATEGORY
 
DATA

- Forecasting the FN vote in Second-Order elections (updated 12 May 2014)

- Forecasting the FN vote in Second-Order elections (Jan. 2014)

- Polling scores by polling type (CATI v CAWI) (updated 20 April 2012)

- Estimating Marine Le Pen's vote in the 2012 presidentials: an experiment (November 2011)

- Data for the 2011 expert forecast survey (in CSV file)

 

 


 
Last modified on Monday 25 April 2016
Copyright Gilles Ivaldi - @2012-2014