Playing Defense

Barely 100 days into his presidency, Francois Hollande is already trying to persuade France that his administration isn't sinking. 

PARIS — La rentrée -- the time of the year that France's workers, students, and politicians come back from their summer holidays -- is a time to take stock, and François Hollande returned from his first presidential vacation at a former fort on the French Riviera in a political free fall.

Cascading approval ratings and a relentless media barrage suggesting that he is an absentee captain of an aimless ship in storm led to a strange spectacle: a president in power for barely 100 days went on France's most popular television show, live and in prime-time, and told his interviewer that, "The government hasn't wasted any time and it has acted rapidly." Historically, freshly elected French presidents -- who, until 2002, enjoyed leisurely seven-year terms -- have rarely felt the need to justify the pace of their activity, especially in their first months in power.

While it is clear that France's presidential metabolism has sped up in the 21st century, particularly during the hyperkinetic just-ended term of Nicolas Sarkozy, the main reason that Hollande needs to make such assurances now is a testament to the scale of the buzzkill France endured in August. After 15 consecutive months of rising unemployment, the nation crossed a grim psychological barrier: surpassing 3 million people on the dole. That's a rate of 10.2 percent unemployment. During the interview, Hollande announced that the government was lowering its anemic economic growth forecast for 2013 from 1.2 percent down to .8 percent. (Soon after, a separate survey of 18 economists resulted in an even lower forecast of just .3 percent for 2013.) Worse, the government forecast for growth this year is zero.

Meanwhile, the existential eurocrisis continues, with no decisive endpoint in sight. And it emerged in the French press on Sept. 8 that Bernard Arnault, who Forbes ranks as the 4th richest man on Earth with a net worth of around $41 billion, has applied for citizenship in Belgium. Arnault insists that France will remain his tax residence, but many people doubt this, given that Belgium is particularly welcoming to the wealthy, and that Hollande has promised to institute a "super-tax" on France's highest revenue earners. In the United States, some people who are rich (or who think they might one day get rich) might have heart attacks over Hollande's new super-tax that will gobble up 75 percent of an individual's annual income that is over 1 million euros ($1.28 million). And most of the first million will be taxed at a 45 percent rate.

If, after obtaining his Belgian citizenship, Arnault has a change of heart about where he wants to pay his taxes, the loss of revenue for the French state could be enormous. His taxes are private, as are his deductions, but he reportedly earns an eight-figure salary as the head of the luxury group LVMH, in addition to the return on his many investments. The question in places like London, Luxembourg, and Geneva is now: how many other rich tax refugees should they expect?

As political honeymoons go, Hollande's has been stunningly short. In May, 62 percent of the French showered approval on him. Barely three months later, that number dropped to 48 percent. And that has been in the absence of any sort of scandal. In the last month alone, he saw a drop of 9 percent in the percentage of French people who believe that he is capable of keeping his (still-popular) campaign pledges, from 57 percent down to 48 percent. Anxiety, meanwhile, has surged. In May, 34 percent of the French described themselves as "rather unsatisfied" (or worse) with Hollande. By early September, the disgruntled rate leapt to 59 percent.

In an effort to restore the faith that voters placed in him in the spring, Hollande insisted in the television interview that he has a clear vision for his presidential term, but that he will need time, patience, and called for the nation to come together in the face of an array of epic challenges. "I know where I am going. I say to the French: I am taking responsibility," he said.

"The current economic slowdown makes it even more difficult to achieve this objective," Hollande continued, "but it makes success even more crucial."

Specifically, he insisted that within a year France will "invert the curve" of rising unemployment; that meaningful economic growth will return in 2014; and that by 2017 France will -- and this would be a small miracle -- eliminate the last traces of its intractable annual budget deficit. The implicit message in these promises is that France faces a very challenging half-decade.

In the same interview, Hollande also offered a grim state-of-the-republic assessment in which he noted "high unemployment, decreased competitiveness, considerable deficits [and] an historic indebtedness." The message to his base: circumstances prevent him from acting like some sort of Socialist Santa Claus for France's poor and middle classes.

So what will he do? His vision to restore France involves a three-part plan to restore its finances. The government plans to increase taxes on the nation's wealthiest citizens by $12.8 billion, and on businesses by an additional $12.8 billion. On the other side of the ledger, Hollande pledged to reduce government spending by yet another $12.8 billion. Put simply, his deficit-reduction solution is two-parts tax increases on people with the money to pay them, and one-part spending cuts on those who receive benefits.

The reality, as any economist or anyone familiar with French politics knows, is that these suspiciously round figures -- 10 billion euros in all three cases -- will turn out to be rough guidelines rather than lines in the sand. It is the job of the government of his prime minister, Jean-Marc Ayrault, to translate Hollande's vision into actual policy.

This will require a great deal of skill in dealing with France's business leaders, workers, and the ruling party's own political base; Hollande, like leaders around Europe and the United States, is struggling with complex questions. How to regulate the economy without handicapping it? How to encourage hiring and reduce the cost of French labor without eliminating crucial benefits and downgrading the value of jobs? How to increase purchasing power without increasing the debt and empowering fickle lenders to decide his nation's fate? How much to tax the rich without spurring them to flee? Finding balance is unlikely to be easy.

On the tax-the-rich front, it remains to be seen whether or not Hollande's plan will spur Jaguar and BMW traffic jams of fleeing millionaires at the borders with Belgium, Luxembourg, and Switzerland, or if it will hurt French industry as CEOs move their companies abroad to preserve their own incomes. But given that Hollande's super-tax enjoyed the support of about seven in 10 voters, according to polls during the campaign, it is hardly a surprise that he is pushing forward. To reassure France's 1 percent, Hollande clarified that his millionaire's tax will just be a two-year measure. And, he insisted, it will only apply to between 2,000 and 3,000 individuals. (Other increases, such as an increased beer levy will affect a broader swath of the population.)

Hollande has also promised to facilitate the hiring of 100,000 young people in poor urban neighborhoods and rural areas in the next year. While the final details still need to be ironed out, it appears that the government will create a new contractual framework that allows for 1- to 3-year work contracts for people between 16 and 25, with the state subsidizing a substantial portion of those salaries. Other efforts to broaden access to job training and lower labor costs to make French workers more competitive internationally, are also being finalized.

But the Socialist president is banking, above all, on re-solidifying France's financial status. This means keeping promises to the European Union to lower the nation's public deficit to 3 percent or less of GDP by the end of next year (which should go over well in Germany.) After which he will further bolster France's status with its lenders by eliminating that deficit altogether by the end of his term. "It will be," Hollande said on television, "the most significant budgetary effort in 30 years" in France.

(He didn't mention that the deficit is expected to drop to 4.5 percent at the end of this year, thanks to reductions made by Sarkozy.)

Speaking slowly and firmly, Hollande told voters that he was never going to be able to do in four months what his predecessors, Sarkozy and Jacques Chirac, failed to do in the last decade. The speech may well stem Hollande's immediate decline, even if it remains to be seen whether the government can convincingly implement the president's vision. There are also the nagging questions of whether the change of leadership in Paris will really be able to untie France's Gordian knot, as Hollande suggests -- and whether the increasingly grumpy French will give him the time he needs to try.

One thing is immediately clear, though. Hollande needs to transform into action the campaign slogan that helped to get him elected:  "Change, it starts now."

After a rocky holiday season, it better.

Ben Stansall - WPA Pool/Getty Images


Workers of the (Arab) World, Unite!

Could American labor unions be the best way to roll back radical Islamists in the Middle East?

TUNIS — While American labor unions organize nationwide to keep their candidate in the White House, organized labor in Tunisia has been facing a struggle far starker than the American partisan divide. On August 28, Islamist militants attacked a peaceful union demonstration in the restive town of Sidi Bouzid, wounding seven, while police stood on the sidelines. The incident capped a summer of similar violence, including firebombings of three regional offices of the UGTT, the country's national trade union center, by Salafi groups; and calls by several mosque preachers to kill union activists.  The onslaught stems from a simple reason: not only are Tunisian unions advocating secular egalitarian values, their deep roots in the community make them the only viable alternative to the nation's Islamists.

Elsewhere in the Middle East, unions are standing up to entrenched autocrats and working to bridge sectarian divides. The General Federation of Bahrain Trade Unions has organized a campaign for social and economic equity to challenge the ruling monarchy while eschewing the sectarian agenda of many demonstrators. In Jordan, an organization of teachers recently won a years-long battle for legal status as an independent union, following suppression by the kingdom and an all-out ban on collective bargaining. And unions in Bahrain and Iraq, nations both torn by Shiite-Sunni strife, are using the struggle for workers' rights as a way to transcend one of the region's most intractable divides.

These struggles point to the presence of a viable social movement in the Arab world, neither wed to autocrats nor controlled by theocrats, that could help stabilize the region's politics and strengthen civil society. "It's a key democratic force," argues Cathy Feingold, international department director for the AFL-CIO. "When you're able to have labor movements that can freely exercise their rights, bargain with employers, improve working conditions, and increase their wages, you address questions of inequality and you create spaces for democratic participation." Islamist groups, which have won loyalty among the poor for providing a social safety net backed by oil wealth, are naturally threatened by a secular organization with its own way of winning economic advantages for its members.

All of which makes for a great opportunity for Washington, which is struggling to find its way in a post-revolutionary Middle East that has offered up few clear allies and perceived dangers in the success of Islamist parties. Arab unions could be nothing less than the key to sustainable, perhaps even secular, democracy. The question is why the United States -- which has a history of using unions to further its foreign policy -- is doing so little to support them.

Last year's parliamentary elections in post-revolutionary Tunisia yielded victory for Ennahda, the long-banned Islamist party, which promised to reconcile its goal of Islamizing society with modernist principles, such as equal rights for women, that are espoused by many Tunisians. It did not win by a landslide, but rather achieved an electoral plurality, and enlisted two secularist parties in order to form a government. Nearly a year later, Ennahda's political opponents, as well as some of its own coalition partners, charge that the party is using its ruling status to monopolize power -- and that its promise of moderation and compromise was insincere.

There is evidence, meanwhile, that organized labor in Tunisia, led by the UGTT trade union coalition, actually enjoys greater popularity than Ennahda. Claiming a membership base of 850,000, its credibility with the population was born of history: it was a key base of resistance to French rule, which led to independence for the country in 1956. Since then, it has shared the challenge of unions elsewhere to aid its constituents without incurring the wrath of a dictator and his friends. While often faulted by members for having too cozy a relationship with the regime, the UGTT asserted its autonomy on numerous occasions. In January 2008, UGTT organizers backed a rare demonstration against the regime's nepotism and corruption in the phosphate mining hub of Gafsa. And, most importantly, the group was quick to throw its weight behind the protestors during last year's revolution, giving quarter to its organizers and losing lives to the gunfire of then-president Ben Ali's police.

But that influence has not yet translated into political power. In last year's parliamentary elections, the UGTT made the fateful decision not to create its own party. So prominent members of the group formed parties of their own instead -- dozens of them. "The population was confused," says Hatem al-Ouaini, a senior official at the country's teachers' union. "They knew only the UGTT and Ennahda." Even so, labor candidates collectively won more seats than Ennahda, though not enough to block its governing coalition. "Our decision not to participate was a big mistake," says Ouaini.

Union officials there espouse secularism and gender equality and look to European and American unions as organizational models and transnational partners. Many Islamists oppose this agenda: Hardliners, including Salafis and the right flank of Ennahda, regard any form of political organization not explicitly called for in Islamic tradition as bid'a ["innovation"] and therefore heretical. Their interpretation of Islam rejects the principle that all faiths and genders are equal. As for transnational partnerships, they wish to steer Tunisia away from the West and toward their notion of a unified Muslim "Umma." According to UGTT legal counsel Muhammad Amdouni, these differences lead both Salafis and Ennahda activists to attempt to undermine unions, and that the two groups differ only in tactics. "The Salafis use violence," he says, "while Ennahda tries to penetrate our ranks with its followers and subvert us from within."

Over the past year, the Islamist-labor conflict has been the principle battle line in the struggle to mold post-revolutionary Tunisia. While labor activists press their agenda through a combination of lawful protests and growing engagement with the political process, Salafis have used violence, and Ennahda has done little to protect labor protesters through the police and security services it now controls. In this conflict, it is labor that has been striving, through its agenda and its nonviolent tactics, for the values of civil society and egalitarianism that Americans call for in the Arab world. The United States is therefore vested in its success.

Support for organized labor was once a pillar of American foreign policy. When General Douglas MacArthur drew up plans to rebuild Japan after World War II, he made the establishment of trade unions a strategic priority, dubbing them "schoolhouses of democracy." Nearly five million Japanese had joined a union by late 1946 -- an achievement widely credited with granting working class people a role in the country's politics. Around the same time, West Germany's Confederation of German Trade Unions cooperated with the United States in stabilizing the post-Nazi economy, as well as re-socializing a generation of German workers.

During the Cold War, American foreign policymakers saw unions as a way to combat communist influence in Eastern Europe, and the labor principle of solidarity led prominent union leaders, notably AFL-CIO chief George Meany, to advocate globally on behalf of human rights denied to workers in Soviet bloc states. Notable among the recipients of U.S. support was Polish activist Lech Walesa, co-founder of the Solidarity trade union, who eventually helped liberate the country. The U.S. government granted support and expertise, but unions also invested considerable resources of their own. Recognizing the value of such efforts, the Reagan administration cooperated with the AFL-CIO in creating the National Endowment for Democracy in 1983.

A similar approach could be useful today in furthering U.S. goals in the Middle East. David Dorn, a recently retired director of outreach to the Arab world for the American Federation of Teachers, began working for the organization during the Soviet period. "The U.S. focus in the [Arab] ‘democracy industry' has been in political party building -- which is legitimate -- as well as a cottage industry of NGOs," he says. "But I think in the Mid-East, a large part of the civil society that represents more of the values we want as Americans is located in the labor movement."

Last year following the Tunisian revolution, Dorn applied for funding from the Middle East Partnership Initiative (MEPI), a program run by the State Department, for teacher training in the country's smaller cities and towns. Noting that voter support for Ennahda had been stronger in those areas than in the big cities of Tunis and Sfax, he judged that focusing his group's support on union activities there might be helpful to labor in the next elections. After two iterations of the proposal were submitted, MEPI rejected it.  Among the reasons cited in an initial MEPI review, Dorn says, was that "one panel member was inclined not to support the American Federation of Teachers politically."

Dorn also describes being struck, on a visit to the American embassy in Tunis, by the naiveté of a young official serving as the MEPI officer. Dorn remembers the officer as saying, when asked why the State Department had funded programs for political parties but not labor unions in the run-up to last year's Tunisian elections, "Elections are political. Unions are only interested in wages and money."

Most of these groups have asked for support from their counterparts in American labor movements. They want new technologies to manage their member base, together with training in how to expand membership and advice on organizing sit-ins and strikes, winning and exercising the right to bargain collectively, and advocating for higher health and safety standards. They also want international lobbying assistance to amend free trade agreements, pressure their own governments, and demand accountability from foreign companies that operate within their borders. The United States government has provided limited funding to American labor groups, enabling them to respond to some of these requests. While it is difficult to determine the total size of these funds, few dispute that support for labor is dwarfed by support for other causes, such as entrepreneurship, political party building, women's empowerment, and education. During the first week in September, the "Highlights & News" page on MEPI's web site listed 173 projects and achievements -- two of which concerned projects supporting organized labor.

The young consular officer whom David Dorn encountered in Tunisia came of age after the fall of the Iron Curtain -- perhaps one reason why he did not manifest an awareness of the potential to advance American interests by supporting Arab labor. But others in his generation are keen to renew this tradition in a changing world. Witness the young people who staff the AFL-CIO Solidarity Center in Washington, which assists unions overseas using what modest government donations become available. "If in the past our outreach was defined by the Cold War," says Cathy Feingold, the union's international department director, "today the main challenge is globalization. As corporations became multinational, unions needed to globalize too." Recent years have seen small Solidarity Center projects in Latin America, the textile and manufacturing hubs of Asia and Africa, and 12 Arab countries. "I always tell people we were on the ground in Egypt before the Arab spring!" says Kate Doherty, a Solidarity Center spokesperson.

Another activist I met with in Washington, who has assisted foreign labor organizations for more than 30 years, echoes the view that American support for Arab labor is far too modest -- but adds that this shortcoming applies as much to the U.S. government as it does to the unions themselves. (Citing political sensitivities amid ongoing projects, he declined to be named.) "During the Soviet period, our unions invested their own money in foreign engagement and trained their own regional experts to develop policies independent of the U.S. government," he recalls. The complexities of Arab engagement today, he suggests, demand a revival of this tradition -- and a new regional approach tailored to the Middle East,  more specific than a general take on "globalization."

On September 13, in a sign of increased interest in the Arab world, the AFL-CIO will honor Tunisia's UGTT and the General Federation of Bahrain Trade Unions with the George Meany-Lane Kirkland Human Rights Award, its highest honor. The heads of both groups will come to Washington to receive it, and invitations have been sent to other Arab unions to attend. Their visits present an opportunity for Americans in and out of government to explore the role these groups have played, and the potential for the United States to find common ground with them. On both sides of the partisan divide, it behooves more Americans to discover that "Solidarity Forever," the time-honored anthem of organized labor in the United States, translates well into Arabic.