French President and Socialist Party leader Francois Hollande announced the resignation of Prime Minister Jean-Marc Ayrault and his replacement by hard-line anti-immigration and anti-crime crusader Manuel Valls. The action demonstrates the ruling Socialist Party’s desperation to reinvent itself after being trounced in municipal elections over the weekend.  As Europe’s economic malaise continues, even the Left is trying to transform itself into nationalists. But French socialism is melting like the Wicked Witch of the East in the Wizard of Oz.

Manuel Valls represents the extreme right wing of the Socialist Party and his rise to power announces the beginning of a radical turn for Europe’s Left.  When he refers to his policies as similar America’s Bill Clinton and Britain’s Tony Blair, he is directly attacking the collectivist bureaucracy of France that controls over 50% of the economy.

Valls has demands “economically realistic” economics for France based on a return to individual responsibilities and moving people off “National Solidarity”, the politically correct term for French welfare. He blames the record 11% unemployment on government interference in business and supports capitalist solutions that include cutting taxes and increasing the retirement age to 62 from 60 years old.

The move to name Valls is seen as a rejection of the Socialist Party’s political pandering to the 12% of French who are Muslims and often heavy users of lavish welfare state benefits.  Valls In his book “Down with the Old Socialism” declared support for immigration “quotas” and complained about Muslims being 60% of the prison population.He favors banning Muslim veils from universities, but supports the right of Jews to wear yarmulkes.  Valls publically stated he was “eternally attached to Israel”.

After being elected to represent the city of Évry in the National Assembly, Valls advocated getting tough on crime and the arming of municipal police.  He unwaveringly opposes legalization of marijuana and rejects the perpetual calls by the Left for bans on nuclear power and genetically modified foods as “fatwas”.

As the Minister of the Interior since 2012, Valls became the most popular member of the French Cabinet by leading the effort to close and expel gypsies (Roma) from their squatter camps across France over the last two years. 

French President Hollande’s eight-minute televised post-election address seemed to be an apology that the Socialist Party had ignored public discontent.  But his commitment to “combat government” by slashing public spending in order to pay for reducing corporate and personal income taxes revealed his real purpose is to redefine the Socialist’s agenda to coop the momentum of the center-right “Union for a Popular Movement” and right wing “National Front.”

Holland has three years until the national elections to change appearances.  But the National Front and their nationalist allies across Europe are now leading in the polls to unseat the Socialists in the European Union Parliamentary elections this May.  Hollande until now has avoided a confrontation with Germany over their domination of EU economic policies by controlling the European Central Bank.  But the French public’s belief that the ECB’s policy of strengthening the euro hurts the French domestic economy to benefit German exports.To gain back any credibility with his own constituents, Hollande must forcefully attack German authority.

At the Party of European Socialists (PES) Congress in Rome on March 1st, the socialists from the 28 EU nations nominated Germany’s Martin Schulz to be the next President of the European Commission.  At the time, the socialist platform made their business-as-usual demands for increasing government economic intervention to “restore jobs, optimism and fairness to Europe.” Schulz was expected to succeed Portugal’s José Manuel Barroso, who in his college days was a leader of the Maoist underground movement known as the Reorganizing Movement of the Proletariat Party and later the Party of the Portuguese Workers/Revolutionary Movement of the Portuguese Proletariat. In an address to the PES Congress, French Prime Minister Jean-Marc Ayrault received a huge ovation when he said: “We have to stop the failure of the conservatives from prompting disillusionment in Europe.”

Socialist parties across Europe are now facing an existential risk that they may collapse back into the same collectivist “dustbin of history” where they seemed headed during the 1991 collapse of the Soviet Union.  But they were resurrected by French Socialist Party leader Jacques Delores, who as President of the European Commission rallied the continent to pass the 1993 Maastricht Treaty establishing the European Union. After 20 years of “accomplishment” the socialists have driven government spending to 49.3% in the combined economies of the 28 members.  That trend has now reversed as French socialism melts away like the Wicked Witch of the East.

The author welcomes feedback @ chriss@chrissstreetandcompany.com Chriss Street teaches microeconomics at University of California, Irvine