France: crisis in the economy and the regime amidst rising class struggle

French capitalism has entered a new period of massive job destruction. Announcements of closures and redundancy plans are multiplying: Michelin, Auchan, ArcelorMittal, and many others. According to the General Confederation of Labour (CGT), 150,000 industrial jobs are at risk in the short term. By closing down production, contractors are setting off a chain reaction, with suppliers and subcontractors filing for bankruptcy or laying off their own workers.

[This article was originally published in French on 23 November at marxiste.org]

At the same time, the general downturn in the economy is hitting many small and medium-sized businesses hard. The number of bankruptcies – 66,800 since January 2024 – has exceeded its peak in 2010. The fall in demand and the explosion in energy prices have made it impossible for thousands of small businesses to repay the loans granted by the state during the pandemic.

Last September, the Banque de France revised its growth forecasts for 2024 down to 1.1 percent, and has forecast 1.2 percent growth in 2025. But these figures do not take into account the current wave of bankruptcies, closures and redundancies. Combined with the tens of billions of euros in budget cuts planned by the government, rising unemployment can only further undermine demand, and therefore growth. For the Barnier government, there is also the risk of being subject to a motion of censure in the National Assembly – and the risk of provoking major social unrest.

The debt question

From the point of view of defending its class interests, the French bourgeoisie has no alternative to drastic austerity policies in an attempt to absorb the public deficit, which is expected to exceed 6 percent of GDP in 2024. By 2025, France will have to borrow at least another €300 billion, as the public debt – which already exceeded €3.2 trillion – continues to grow.

French big business needs a strong government. Instead, it has the government of Michel Barnier / Image: European Parliament, Flickr

Since the dissolution of the National Assembly last June, the conditions for financing French debt have deteriorated. Spain and Portugal are borrowing at lower interest rates than France. Interest payments on France's public debt alone could reach €55 billion in 2025, then €70 billion in 2027 and almost €100 billion in 2028. By comparison, the national education budget in 2024 was €63 billion.

In October, the rating agencies Fitch and Moody's assigned a ‘negative outlook’ to France's debt rating. In its explanation, Moody's points out that France is characterised by “a political and institutional environment that is not conducive to a coalition around policy measures likely to improve the budget balance in a sustainable manner”. In other words, the rating agency is sanctioning the crisis of the regime – the discrediting and deadlock of the mechanisms that are supposed to guarantee the implementation of the ‘reforms’ that the bourgeoisie needs.

French big business needs a strong government. Instead, it has the government of Michel Barnier, a member of a party which has less than seven percent of the vote, and which is forced to negotiate constantly with the various competing and hostile factions of its relative ‘majority’, as well as with the right-wing opposition of Rassemblent National (RN). To date, RN has refused to vote in favour of the motions of censure proposed by the New Popular Front (NFP), but the growing dissatisfaction of Marine Le Pen's electorate could prompt the party to change its position on the issue of censure in the short term.

Social anger

Following the early parliamentary elections, we wrote: 

“Lenin stressed that a revolutionary crisis is often heralded, or even initiated, by a crisis in the political regime of the bourgeoisie, in other words the institutions, mechanisms and methods which usually guarantee its domination. Clearly, the crisis of the regime of French capitalism, which is not new, is in the process of crossing a new threshold. As Lenin also pointed out, such a crisis, and the division of the ruling class which accompanies it, opens up a space for the exploited class to intervene and try to turn the situation to its advantage. We may not be there yet, in France, but we are heading straight for it. The result of the legislative elections has opened up a new phase of great political instability.”

It took Emmanuel Macron three months to appoint a new government. The passing of the budget hangs on the goodwill of RN. As for the mass of workers, they are not following the details of the parliamentary games, but they are taking note of the dirty attacks this government is preparing, as well as its extreme fragility. All layers of society – with the exception of the richest, whatever Barnier may say – are in the crosshairs of the austerity measures that are on the agenda. As a result, anger is on the rise throughout society.

All layers of society – with the exception of the richest, whatever Barnier may say – are in the crosshairs of the austerity measures that are on the agenda / Image: Unité CGT, Twitter

In October, strikes took place in the French health insurance system to protest the €4.9 billion in cuts proposed in the Social Security Finance Bill (PLFSS). Several hospitals are still on strike to demand more resources. Strikes broke out on 19 November among child carers to demand better pay and more resources. The civil service unions have announced a strike for 5 December. Following a warning strike on 21 November, the national railway unions are planning an unlimited strike from 11 December against the dismantling of freight services and the opening up of the industry to competition.

At the beginning of 2024, France, and Europe generally, experienced one of the most powerful agricultural revolts of recent decades. Since then, there has been no improvement in the living and working conditions of small farmers, and the movement is once again gathering pace.

Finally, in the face of the wave of redundancies and factory closures, a number of indefinite strikes have begun in the metal, car and chemical industries. Other strikes will undoubtedly break out to defend jobs.

A problem of leadership

The coming months will see a new phase of intensified class struggle. In this context, workers need a clear and militant battle plan, yet their official leaders are not up to the task.

France Insoumise has shut itself away in the Palais Bourbon [seat of the National Assembly], where it is proliferating doomed amendments, instead of throwing all its energies into organising the extra-parliamentary movement in the streets, workplaces and working-class neighbourhoods.

As for the leadership of the CGT, it is calling on the government of the rich to declare a ‘moratorium on redundancies’, that is to betray the interests of its masters. It is true that the CGT is also calling for “a day of convergence of all struggles for jobs” on 12 December, but that will not stop the bosses who are preparing to lay off workers and close sites. The strategy of ‘days of action’, no matter how massive, has repeatedly proved to be a failure.

Last year, for example, this strategy doomed the great struggle against pension reform to defeat, despite its enormous potential and the overwhelming support of the majority of the population. Several sectors had drawn the right conclusions and embarked on indefinite strikes, but they found themselves isolated because of the refusal of the CGT leadership to extend these strikes to other sectors of the economy.

The strategy of one-off ‘days of action’ is channeling the movement, limiting its scope and preventing it from taking a form that would threaten the government and the ruling class. As Sophie Binet (general secretary of the CGT) openly acknowledged on television in April 2023: “We're not asking for this government to fall, but for the pension reform to fall”.

Only a movement strong enough to topple the government has the power to stand in the way of its counter-reforms. The two are inseparable. This is as true today as it was during the movement against pension reform. By abandoning the objective of bringing down the government, Sophie Binet is de facto facilitating the implementation of its reactionary policies.

Unité CGT

Since December 2019, leading CGT executives – including Olivier Mateu, CGT secretary for Bouches-du-Rhône, and Emmanuel Lépine, secretary of the National Federation of Chemical Industries – have built a left-wing current within the confederation: ‘Unité CGT’. On several occasions, Unité CGT has stressed the need to prepare a vast movement of indefinite strikes.

The leaders of Unité CGT should not be content to defend their programme alongside the impotent and ultra-moderate programme of the CGT leadership / Image: Unité CGT, Twitter

This left wing of the CGT emerged much strengthened from its congress in March 2023. In particular, it voted to reject the outgoing leadership's ‘Activity Report’  – the document detailing its balance sheet of recent events. This was unprecedented in the history of the CGT.

Faced with the current wave of redundancies, Unité CGT has a completely different programme from that of the leadership: “We must expropriate and nationalise, under workers’ control, the major industrial groups, from the big bosses to the sub-contractors.” We absolutely agree. 

The entire CGT should defend this programme. It would have a huge impact on the consciousness and fighting spirit of millions of workers who are suffering from austerity policies, redundancies and all the consequences of capitalism in crisis.

The leaders of Unité CGT should not be content to defend their programme alongside the impotent and ultra-moderate programme of the CGT leadership. Now is not the time for diplomacy with Sophie Binet and her entourage; now is the time for a frank and serious struggle, within the CGT itself, to provide this powerful organisation with a programme and a strategy commensurate with the stakes and the gravity of the situation.