France: the birthplace of neoliberalism

France is not just the motherland of human rights. It also played a crucial role in the inception of neoliberal thought which now starves the peoples of Europe. It has had huge responsibility in enforcing the rigorist and moralistic tyranny that today is sterilising the lifeblood of our continent.

It is actually France who, in 1973, once again acting as precursor, was to take a historic step along the path to international financial liberalisation by prohibiting its central bank from printing money as a fallback. It is with this yardstick that the Banque de France’s new regulations – in particular article 25 – must be interpreted, which were adopted 3rd January 1973 and which indicate that “the Public treasury may no longer borrow money from the Banque de France.” This therefore definitively held the governments to the mercy of the banking system, since their Treasury was de facto no longer able to borrow from its central bank. This was a crucial turning point in the management of Western (and even global!) public finances which from that point onward laid the path for France, which owed nothing to chance at a time when its president, Georges Pompidou, was a former banker. No biggy though, after all, since the French public debt, at 20% of GDP in 1970, was henceforth to see an uninterrupted descent into the depths of hell.

For all that, this episode was not only just the very first milestone of a monetary stranglehold that Raymond Barre, “France’s best economist” and Giscard-d’Estaing’s Prime Minister, helped to spread through institutions from 1976, and who was to preside over the fate of Europe’s first authentically neoliberal government. Well before the rise to power of Great Britain’s Thatcher in 1979 and USA’s Reagan in 1981, it is therefore France who first led the attack against public spending and social programs. In reality, without Barre and his famous plans the Euro Zone wouldn’t have come about in the late ‘80s, since it was under his great patronage that Europe took that mercantile turn which now proudly embodies its hallmark.

It is therefore not so much the Franco-German axis as it was the progressive standardisation and evaporation of the economic and financial debate throughout “Western” Europe that was to shape the continent. It is this sacred union, initially anti spending and deficits then pro free markets and financial self-regulation (under the socialist Beregovoy toward the end of the ‘80s), which was to dig the trench – and now the grave – of the European Union. It is therefore France who, before anyone else, defined and laid the foundations of the sacrosanct European unification which, by imposing budgetary stringency, was henceforth to paralyse and monopolise the whole continent’s macroeconomic debate. The monetary system was infected and this brought about the decisive and irreversible aggravation of unemployment rates that would never return to their 1970s levels, since employment no longer figured in governments’ priorities.

It is to Raymond Barre that we owe the definitive nail in the coffin on the Gaullist Keynesian ideal. It is since his reign that employment is considered only as a simple variable that helps to determine financial stability. And it is therefore back to 1976 (the arrival of Barre and his plans) that we can date the birth of the infamous policy of austerity, as well as the death of humanity.