Ségolène’s speech at Villepinte

For some time, Ségolène Royal, the French Socialist presidential candidate, benefited from a good degree of sympathy in the UK. Her charm, her praise of Tony Blair’s policies and criticism of some French policies like the 35-hour week had gained her support in British media and political circles. Many saw her as the progressive figure needed to modernise the Socialist Party, on the model of Tony Blair’s New Labour.

But the visit paid by Nicolas Sarkozy, her main competitor, to the British Prime Minister, together with Ségolène Royal’s speech in Villepinte on February 11 2007, put an end to this honeymoon. To many observers, Royal’s speech unveiled her true nature – that of an unreconstructed French socialist. It prompted uniform negative reactions, in particular from the British press. While the Economist dubbed Royal ‘the lady in red’ , the Financial Times reported that if she is elected, many French businesspeople will flee to London and other foreign cities.

True, most of Ségolène Royal’s ‘presidential pact’ does not sound liberal to British ears. If Tony Blair proposed to increase the minimum wage to €1,500 a month, push up unemployment benefits to 90 per cent of previous salary, raise the lowest pensions by 5 per cent or renationalise two of the main domestic energy companies, he would be certain to trigger a massive outcry in the City and the British political class.

Many UK commentators questioned whether France can really afford to increase public spending to the extent suggested by Ms Royal. The Socialists themselves expect it to cost €31 billion a year. France’s public debt, as Ms Royal noted in her speech, is now at 64 per cent of GDP. It is of little comfort that the party’s spending plans, like those of the UMP, are based on the optimistic assumption of 2.5 per cent GDP growth a year. Economists also doubt whether such measures would be enough to boost the French economy. For instance, increasing the minimum wage would help to fight growing income inequalities, but it would also deter businesses from hiring or even retaining low-skilled workers.

However, it would be a mistake not to read more into Ms Royal’s speech. First, most of her proposals were already part of the Party’s programme, which was drafted before her nomination as a candidate in November last year. Royal can hardly ignore this programme. Her ambiguity partly reflects that of the Socialist Party, uncertain about its direction and how ready it is to change.

It would also be a mistake to confuse Ségolène Royal’s socialism with old-style socialism. Some of her language is borrowed from the right. She speaks of order, family, discipline and effort. She also speaks of work, duties, innovation and competitiveness. This rhetorical change is not insignificant. In politics, words matter, and these words are new to the Socialist Party.

In addition, the first part of Ms Royal’s speech is addressed to France’s entrepreneurs, praising their courage to take risk and innovate. Ms Royal acknowledged that a country’s wealth and jobs depend most of all on its small and medium sized enterprises (SMEs). She emphasises the need to support them and create the right regulatory environment to help them thrive. This may sound familiar to British ears, it is not to the French.

Ms Royal goes even further in a recent interview to the French magazine Paris Match by saying that the first priority is to reconcile France with its businesses. She argues that France needs to shift from a conflict-based political culture to a more constructive one, renewing a moribund social dialogue.

She also suggests developing closer ties between businesses and schools, breaking a traditional French taboo. Some would argue that she is only paying lip-service to French businesses. But, Royal makes some interesting proposals that could benefit SMEs such as making a better use of public procurement to help small companies, or increase public R&D spending by 10 per cent a year.

This still won’t be enough to prove that Ms Royal can reconcile her old-style socialist proposals for more social protection with a modern and progressive view of the economy. Ségolène Royal is right: boosting France’s competitiveness through innovation and a better education system is the only way to face the challenge of globalisation. But she needs to be consistent and explain how she can make that happen.

She hints at streamlining the bureaucracy, giving more power to the French regions and reducing public spending. This is too vague: Royal needs to make more precise and concrete proposals. Over the last decade or so, too few politicians have made the effort to explain to the French what the impact of globalisation is and what needs to be done to put the economy back on track.

This year’s elections provide the French political class with a unique opportunity to renew the public debate and raise the right questions about France’s future. It is vital that the two main candidates, Ségolène Royal and Nicolas Sarkozy, seize this opportunity. Should they fail to do so, resistance to change in France is likely to remain as strong as ever.