Jospin bets on growth to save poll pledges

Maastricht hurdle: France's new regime and Germany's old stagers struggle to get fit for monetary union

It is a ritual dance. The French government proposes a radical change in the country's public welfare system. Pressure groups of both Right and Left call their supporters onto the streets. The government backs down or, at least, offers a compromise.

Much of the previous government's time and credibility were expended in this way. In the case of the new Socialist-led government, the process has been squeezed into one week.

In his general statement of policy last Thursday, the Prime Minister, Lionel Jospin, made one unexpectedly bold, money-saving proposal. He suggested that child allowances should be paid in future only to families with a monthly income of less than Fr25,000 a month (pounds 2,600, or pounds 31,200 a year). In other words, Mr Jospin was suggesting a means test, a principle which the French welfare system has always strenuously refused.

Alarm bells rang. Socially right-wing family associations said the scrapping of middle-class child allowances struck at the heart of family values and would send France's (healthy) birth rate into rapid decline.

The unions, and Communist and left-wing Socialist politicians, suspected they saw the beginning of means-testing throughout the entire welfare system, something far more radical than the previous right-wing government had dared to propose. They fear Mr Jospin may apply the same approach to the chronically overspent public health system, reducing public coverage for wealthier people and forcing them to bridge the gap with private health insurance. The government is under pressure to meet the budgetary guidelines for membership of European monetary union and fund its reflationary campaign promises. There is some evidence that it is thinking of wider means-testing in health and welfare policy.

Or was thinking. The vehemence of the response to the abolition of middle class family allowances has sent the government into a confused retreat. Within one day of Mr Jospin's statement, his deputy, the employment minister, Martine Aubry, said the Fr25,000 threshold was up for negotiation. Not good enough, said the pro-family groups. Demonstrations were called on Tuesday, including one outside the National Assembly.

On Wednesday, the official government spokesperson, the culture minister Catherine Trautmann, said there was no question of adopting means testing throughout the health and welfare system. Various other government figures suggested ways in which the reform of family allowances might be watered down. All the compromises were rejected by the conservative, pro-family campaigners.

The revolt is the first domestic test of the nerve of the Jospin government, which insists that, unlike its predecessors, it will act as it speaks and deliver its promises. Delaying or watering down the family allowance cuts - which could save up to pounds 1bn in a full year - will make it even harder to meet the guidelines for Emu membership this year.

The Jospin government has let it be known it hopes to reduce the budget deficit to 3.4 per cent of GDP in 1997, well over the Maastricht treaty target of 3 per cent. But it hopes to make this politically acceptable to its EU partners, especially Germany, and economically acceptable to the markets, by proposing a 1998 budget later this year which hits the 3 per cent figure.

All estimates, both official and unofficial, suggest that next year's deficit will be well over 4 per cent, even before Mr Jospin starts to spend money on his campaign promises. How do the figures add up? At present, they don't. Mr Jospin is playing for time and praying for steeper growth in the French economy.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Voices
Ukip leader Nigel Farage arrives at the Rochester by-election count
voicesIs it any wonder that Thornberry, Miliband, and Cameron have no idea about ordinary everyday life?
Sport
sportComment: Win or lose Hamilton represents the best of Britain
Life and Style
tech
Extras
indybest
Sport
Arsene Wenger reacts during Arsenal's 2-1 defeat to Swansea
footballMan United and Arsenal meet on Saturday with both clubs this time languishing outside the top four
News
i100BBC political editor Nick Robinson had a lot of explaining to do
News
A girl plays on a Sony 'PS Vita' portable games console
news
Life and Style
Nappies could have advice on them to encourage mothers and fathers to talk to their babies more often
newsTalking to babies can improve their language and vocabulary skills
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Female Support Workers / Carers - From £8.00 per hour

£8 - £12 per hour: Recruitment Genius: To assist a young family with the care ...

Recruitment Genius: Customer Service Executive

£20000 per annum: Recruitment Genius: A Customer Service Executive is required...

Argyll Scott International: Commercial Finance Manager

£55000 - £70000 per annum: Argyll Scott International: My client, a world lead...

Argyll Scott International: Commercial Finance Manager

Negotiable: Argyll Scott International: My client, a world leading services pr...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines