D'un côté les filles:
- Martine, qui a ralliée Fabius, Montebourg et Strauss-Kahn (et toute "la Gauche Caviar" derrière chacun d'entre eux)
- Ségolène: "Aimez vous les uns, les autres ou bien disparaissez". On espère que les socialistes ne vont pas appliquer ça au pied de la lettre, sinon soit il faudra mettre un carré blanc devant toutes les retransmissions des prochains congrès PS, soit ça sera encore plus sanguinolant que la série des SAW. "Sortez couverts" aussi?

Les reconstructeurs du PS sont partis où?

De l'autre les garçons:
- Delanoë, largué par Marine Aubry, le pauvre...mais lui il a un bon bilan à la Mairie de Paris. Puisqu'on vous le dit!
- Fabius, un autre ex de Carla Bruni (en même temps tout le Gotha lui est passé dessus) et comme Carla: les idées à gauche, le porte-feuille à droite. Et un peu de sang contaminé aussi...
- Hollande: qui balance un "Merci et à demain", on a eu chaud ça aurait pu être "Bon dimanche, sous vos applaudissements". Le flan à lunettes s'est auto-congratulé alors qu'en moins de 10 ans, il a mené le PS à l'abattoir. Une branlée royale! (sans jeu de mot). Pour les idées, il en faut, il a prôné, entre la poire et le fromage, un nouveau Bretton Woods pour "coordonner les politiques monétaires et la régulation du système financier". Impressionnant non? Il a fait l'ENA quand même!
- Moscovici: qui joue les saintes nitouches, maintenant qu'il est tout rasé de près. Aubry et Montebourg n'ont même pas mangé avec lui le midi. Les vilains! On le dit soutenu par la "Ligne Claire" du PS, une sorte de "Clan des Siciliens", deux vieux briscards et un jeune effronté. (Gérard Collomb Maire de Lyon, Jean-Noël Guérini président du conseil général des Bouches du Rhône, Manuel Valls, le libéral social)
- Vincent Peillon, toujours aussi discret, le théologiste du parti adore se gargariser de concepts fumeux sur la possibilité d'un PS libéral et social, ou juste social avec un soupçon de libéral ou l'inverse, enfin, il cherche. Promis dès qu'il trouve, il nous appelle.

Pour les querelles de personnes, les rivalités, les vannes franchouillardes beaucoup de monde. Pour les idées, beaucoup de déçus.

Et la France attend, en vain, une réelle opposition. Faudra-t-il aller encore plus loin à gauche pour la trouver? Mystère et Prudence!

Bear Stearns problematische Papiere in Höhe von 13 Billionen € in den Büchern gehabt hätte.  Bisher war ja nur von 400, 600 oder 800 Mrd. € Verlusten die Rede. Wie ich am Beispiel der BayernLB dargestellt habe, ist die Differenz zwischen den 400 Mrd. € und der Billion wohl nur eine Frage der Bewertung der Papiere, für die es weder Angebot noch Nachfrage und damit keinen Preis zu geben scheint. Das allerdings ändert sich gerade, schließlich ist es der Citigroup gelungen, eine Tranche von 12 Mrd. an eine Gruppe Finanzinvestoren (zu Deutsch Heuschrecken) zu verkaufen, die am Ende uns alle vor einem zweiten schwarzen Freitag rettet. Die Pause, die der "Markt" gemacht hat, geht also langsam zuende. Und es setzt sich das Bewußtsein durch, dass die Subprime-Pakete vielleicht nicht so wertvoll wie gedacht, aber auch nicht ganz wertlos sind.

Wir haben ein Erkenntnisproblem und der frühere französische Finanzminister Strauss-Kahn, der wegen einer Bestechungsaffäre zurücktreten mußte, weiß die allgemeine Diffusion mit seiner Meldung zu nutzen. Am Wochenende tagen Finanzminister, Weltbank und Weltwährungsfonds. Und da will der Mann sich eine ordentliche Reform absegnen lassen: Gold im Wert von 12 Mrd. € soll für ein großes Reformprojekt des Fonds verkauft werden und in eine Stiftung fließen. Je schrecklicher das Szenario, desto größer die Zustimmung der IWF-Mitglieder. Der Lafontaine-Freund und Sozialist steht in  der Tradition der Planfication, mit der selbst die Gaullisten versuchten, privatwirtschaftliches Eigentum mit staatlicher Lenkung der Wirtschaft zu verbinden. Das lässt auch beim geballten Sachverstand des IWF nicht das beste befürchten.

Beim Weltbanktreffen an diesem Wochenende treffen sich ohnehin die kapitalen Böcke und nicht die Gärtner. Die Welt- und Zentralbänker sind das Problem und nicht die Lösung. Und ahnen es wohlmöglich nicht. Wenn die Weltbank heute steigende Preise für "so schlimm wie Finanzkrise" selbst hält, hat sie von dem Zusammenhang beider Phänomene wenig begriffen. 

Die Hayek-Gesellschaft hat eine Anzahl sinnstiftender Texte zusammen gestellt, die das Phänomen gut beleuchten: Roland Baader stellt etwa fest:

Stattdessen ist allein in den zehn Jahren zwischen 1996 und 2006 die Weltgeldmenge (M3) um 50 Prozent mehrv gestiegen als das Weltsozialprodukt. (Das Welt-BIP um 60 Prozent, die Weltgeldmenge um 90 Prozent). Betrachtet man einen längeren Zeitraum, so wird einem schwindelig: In den USA ist die Geldmenge von 1959 bis 2004 von 302 Milliarden US-Dollar auf 9.500 Milliarden gestiegen, eine Explosion um dreitausend Prozent. In derselben Zeit ist die Kaufkraft des Dollars um 85 Prozent gesunken. Die Immobilien-, Kredit- und Hypothekenblasen der letzten Jahre konnten nur deshalb so gigantischen Umfang annehmen, weil Greenspan ab 2001 beim Geldangebot den Turbo eingeschaltet hat. Die Geldvermehrungsrate schoss 2001 auf 20 Prozent hoch, schwankte in den folgenden drei Jahren um 10 Prozent pro Jahr – und erreichte gegen Ende 2007 fast 18 Prozent. In den meisten europäischen Staaten waren die Zahlen nicht viel besser. Wahrlich beängstigend, ja geradezu apokalyptisch werden die Zahlen, wenn man die Summe aller inzwischen angehäuften Finanzanlagen (ohne Immobilien, aber inklusive der sogenannten Derivate) betrachtet. Diese wird auf weltweit 300.000 Milliarden Dollar geschätzt. Und das bei einem Weltsozialprodukt von rund 50.000 Milliarden Dollar. Das bedeutet: Sollten sich die derzeitigen Turbulenzen an den Finanzmärkten fortsetzen oder gar verschlimmern – und sollten dann auch nur 20 Prozent dieser Finanzanlagen abgeschrieben werden müssen, so würden sich die Verluste zu einem Betrag summieren, der um 20 Prozent über dem Weltsozialprodukt liegt."

Da scheint Strauss-Kahns Billion doch ganz kuischelig niedrig. Nur sein Versprechen, "keine Sorge, wir kriegen das in den Griff" erscheint schon ein wenig unplausibel. Die Krise hat einen einfachen Grund: Es gibt zuviel Geld, nicht zuwenig. Und es ist für die Geschäftsbanken zu leicht und zu billig, sich neues zu besorgen. 

Joachim Starbatty hat schon im Oktober 2007 mit Hilfe von Mises, Hayek und Schumpeter die gegenwärtigen Turbulenzen erklärt und deutlich gemacht, worin das Problem besteht: Der perversen Elasttizität des Kreditangebotes, die bei F.A. v. Hayek schon für die Weltwirtschaftskrise hinhalten mußte: 

Steigt die Nachfrage nach einem Gut, steigt auch der Preis. Steigt die Nachfrage nach Geld, bleibt der Preis gleich, was alle Marktteilnehmer verleitet, sich mehr Geld zu leihen, als gut für sie ist. In der realen Welt führte dies zu einer massiven Investition in die Produktion und eine damit verbundene Auswirkung der Kapazität, die am Ende niemand mehr abnehmen könnte. Starbatty weist darauf hin, dass die kreditfinanzierte Investition heute nicht mehr alleine in Produktion investiert wird, sondern in Finanzprodukte aller Art, deren Wert dann scheinbar über Gebühr steigt.

Wenn die Geldmenge schneller wächst als die Wirtschaft vermindert jede zusätzlich ausgegebene Einheit den Wert jeder einzelnen. Geld wird dadurch weniger wert, dass es mehr wird. Das ist das Phänomen, dem wir uns gegenüber sehen. Und der Grundsatz allen Übels. Deshalb steigen die Preise für Rohstoffe und Nahrungsmittel überproportional an: Ihr Wert bleibt gleich - der des Geldes sinkt.

Schumpeter nannte dagegen ein probates Mittel: Die Goldbremse. Wenn die Geldmenge mit dem realen Wert des Goldes unterlegt sein muß, ist ihr Wachstum kaum möglich. Und die Möglichkeit, der Banken, sich zu refinanzieren, endlich. Aber die Rückkehr zur Goldwährung ist illusorisch.

Mit Hilfe der Geldentwertung reduzieren die Staaten ihre Schuldenlast. Mit niedrigen Zinsen erleichtern sie ihre Finanzierung. Mit dem Drucken frischen Geldes vedecken sie deren Wirkung. Gleichzeitig enteignen sie ihre Bürger mit der kalten Hand, indem sie deren Eigentum entwerten und mit Hilfe der kalten Progression den Steueranteil am Einkommen der Bürger unbemerkt erhöhen. Es wird also keinen Abschied von der keynesianistischen Papiergeldschöpfung geben.

Aber wir werden sehen, dass ihre Wirkung begrenzt wird. In den Siebziger und Achtziger Jahren hat die Bundesbank etwa mit der Geldmengensteuerung annähernd Preisstabilität hergestellt. Die realen Inflationsraten mögen über den eins oder zwei Prozent gelegen haben, die offiziell ausgewiesen waren. Und auch für die traditionelle Industrie war das Geld zu leicht zu kriegen: Deshalb investierte sie zuviel in die Produktivität, was aber nicht zu einer konjunkturellen, sondern strukturellen Krise führte: Arbeit wurde durch Kapital substituiert. So entstand strukturelle Arbeitslosigkeit, weil keine neuen Unternehmen neue Arbeitsplätze schafften.

Die EZB stellt zwar Liquidität zur Verfügung, senkt aber wenigstens nicht die Zinsen. Wenn FED und britische Zentralbank sukzessive Liquidität aus dem Markt nehmen, wäre viel gewonnen. Eine Rezession ist dann unvermeidlich. Aber sie verhindert die Depression.

Der Verhaltenskodex des internationalen Großbankenverbandes ist auch ein Schritt in die richtige Richtung, auch wenn nicht jede Idee richtig ist. Er muß aber mit Sanktionen verbunden sein. Die von mir vorgeschlagene Ausweitung des Einlagensicherungsfonds wäre eine solche Sanktion. Außer der mittlerweile staatlichen IKB, die unter der Kontrolle der KfW steht, ist keine deutsche Privatbank in ernsthafte Schwierigkeiten geraten.  Wer da rausfliegt, ist aus dem Geschäft. Und alle anderen Banken müssen den Kopf dafür hinhalten.

Das macht risikobewußter, gerade  bei eigenen Geschäften.  Deshalb ist die Verschärfung des Regelwerks der europäischen Bankenaufseher auch eine gute Idee. Sie erschwert die Refinanzierung und macht Geld knapper.  

Dabei sollte allen bewußt sein: Die Weltwirtschaft auf Papiergeldbasis bleibt ein Schneeballgeschäft. Sie funktioniert nur noch solange, sie allen nützt. Aber da eine Alternative wie die private Geldschöpfung nicht politisch umsetzbar ist, gilt wohl: Evolution statt Revolution.

Leo en El Confidencial.com:"Strauss Kahn, director del FMI, admite que la crisis empeora: "Es más seria de lo que parecía" (EP - 17/03/2008 13:56h y Actualizado: 17/03/2008 16:19h)

"El director gerente del Fondo Monetario Internacional (FMI), Dominique Strauss Kahn, admitió hoy que la ralentización económica es "más seria y global de lo que parecía hace una semanas", lo que demuestra que "el entorno está empeorando".

Reconoció, asimismo, que los efectos de la recesión norteamericana se dejarán sentir no sólo en la economía europea sino también en los países emergentes. "Lamentablemente no se puede esperar que estos países vayan a evitar la ralentización incluso teniendo hoy en día un gran nivel de crecimiento", dijo el máximo responsable del FMI durante una rueda de prensa en la sede de la OCDE en París. [...]"

El resto de las noticias económicas del día son igualmente lúgubres.

• El pánico se apodera de las bolsas y el sector financiero europeo
• Bush: "Una cosa es segura, EEUU vive tiempos difíciles, pero hemos adoptado medidas decisivas"
• El Banco Inglaterra inyecta 6.362 millones por primera vez desde la crisis
• El importe de los impagos de familias y empresas se dispara en enero un 48,7% interanual
• El euribor sigue escalando en marzo: acumula once subidas consecutivas
• El empeoramiento de la crisis financiera lleva al petróleo a registrar fuertes descensos

Los mismos titulares repetidos en El País, El Mundo, Expansión y CincoDías, entre otros.

Y me ha venido a la mente uno de los cuentos sufís de Idries Shah, que por simple, tiene una carga de mala leche importante. Lo cito de memoria.

"Estaba Nasrudin, (personaje que simboliza al tonto del pueblo), paseando delante de la lujosa casa de un vecino, el cuál andaba subido a una escalera instalando una alarma en su tejado.

-¿Y eso para qué es? - le preguntó Nasrudin

- Es una alarma anti-incendios. Me avisará si se produce uno en mi casa. - contestó el vecino.

- No funciona. - contestó Nasrudin - Tu casa se quemará igual."

Y eso que hoy no quería hablar de KPIs, Cuadros de Mando y de Operaciones.

The United States is stepping up its call for a comprehensive reform of the International Monetary Fund (IMF) in order to better support global growth and respond to global economic challenges.

In a speech to the Peterson Institute for International Economics in Washington, David McCormick, Under Secretary for International Affairs at the US Treasury Department, underlined the need for a reform package aimed at making the IMF more relevant in today’s economic system.

“The world economy is constantly changing, and the IMF must now change with it, as it has successfully done in the past, McCormick said in his address. “At the highest level, the IMF's core mission remains promoting an open and growing world economy and the smooth functioning of the international monetary and financial system.”

McCormick said the US Administration “wants to see the IMF continue its record of success into the future” and proposed three important steps to ensure that the organization evolves how it and its departments perform their mission, governance, and operating model so that they can continue to play a central role in the global financial system.

“First, the IMF needs to evolve how it performs its mission to meet the forward-looking challenges of the international monetary system,” McCormick said. “Second, it needs to reform its governance structure to reflect the growing weight of dynamic emerging markets in the global economy. Third, the IMF needs to change its operating model to reflect its new mission, ensure ongoing budget discipline, and put in place sustainable sources of income.”

The three areas of reform “must be, in my view, the priority for all stakeholders who are committed to an effective, sustainable, and relevant IMF,” he said.

McCormick stressed that the rise of dynamic emerging markets, especially in Asia, is a remarkable and welcome development, accounting for more than half of the growth in the world economy in the past five years.

“The IMF must now adapt to accommodate the increasing weight and responsibilities of these emerging economies,” he said. “That means updating the IMF's outmoded governance structure, which reflects more the economic realities of the 1970s than the global economy of today. As a result, as many countries have seen their relative weight in the world economy rise sharply, they have also seen their voting weight in the IMF fail to keep pace.

The US Administration is also proposing a reduction in the number of chairs in the IMF Board from 24 to 22 seats in 2010, and to 20 seats in 2012.

“In doing so, the number of developing and emerging market country chairs should be preserved,” he said. “To allow for greater voice of emerging markets and low-income countries, we also advocate an amendment to the Articles so that all Executive Board members are "elected," abolishing the current practice of "appointed seats" for the five largest shareholders.”

Such a move would eliminate the rule that reserves positions for the US, Japan, Germany, France and Britain in the Board, resulting in a fewer European directors on the IMF governing body.

McCormick recognized the the important steps already accomplished by the IMF leadership, and thanked Managing Director Dominique Strauss-Kahn, Treasury Secretary Hank Paulson for their guidance in this long-term reform process.

“The reforms I have just described are significant, comprehensive, and achievable, and like compounding interest will deliver substantially increased benefits over time,” he concluded.

Dominique Strauss-Kahn es el nuevo Director General del Fondo Monetario Internacional (FMI). Hombre culto e inteligente, profesor de economía y abogado de negocios, antiguo ministro de comercio exterior (1991-93) y de economía y finanzas (1997-99) y líder de la corriente más liberal del PS francés (se postuló sin éxito como candidato a las elecciones presidenciales de 2007 contra Ségolène Royal), fue propuesto para dirigir la entidad financiera por el presidente francés, Nicolas Sarkozy, y presentado como el candidato "europeo".

¿Un socialista propuesto por un conservador para dirigir una entidad ultraliberal responsable de la ruina económica y social de amplias regiones del mundo? Paradógico, ¿no? O quizás no tanto...

Dominique Strauss-Kahn, "DSK" como se le conoce popularmente, está entre amigos: es miembro del Club Bilderberg, judío -al igual que su esposa Anne Sinclair- y pro-israelí. Sus opiniones respecto a Oriente Medio e Irán -ampliamente difundidas desde su blog- coinciden en lo fundamental con EEUU e Israel y se alejan de la postura tradicional francesa. Además, este "social-liberal" como le define la izquierda del PS, preside el comité científico de la Fundación Jean-Jaurès, una asociación sostenida por la estadounidense Fundación Nacional para la Democracia (NED, National Endowment for Democracy). La NED fue fundada por Ronal Reagan en 1982 para extender mundialmente el modelo estadounidense de democracia -ultraliberal- y en la actualidad promociona más de 6.000 asociaciones políticas y sociales en todo el mundo, actuando en no pocos casos como auténtico "brazo político" de la CIA.

En fin, que el nuevo dirigente del siniestro FMI no nos ofrece ninguna esperanza de cambio positivo. Habría que ser muy ingenuo para creer tal cosa.

In the name of openness (ouverture in French), 6 Socialists have been appointed to the government, including the post of Foreign Minister under Socialist hawk, Bernard Kouchner.  A swathe of centrists have been given positions too, led by Hervé Morin in Defence, although there has been little reaction regarding their role as most expected them to toe the government line anyway.

The next phase of the openness policy has been to create a real status for the opposition within the legislative system.  Often devoid of any power when the government holds a strong majority in the National Assembly, the opposition does not have any official role.  In the last parliament, they were largely reduced to sniping from the sidelines, and from a particular method of filabusting, by swamping any controversial bills with amendments (as was does against the law which brought in the new youth employment contract which led to protests and some rioting in France in 2006).  The government is always able to ensure that it has the last word on the debate though, by the infamous article 49-3 of the Constitution which enables the government to engage its responsibility on a cloture vote - effectively transforming the vote on the bill into one of confidence in the government.

Sarkozy affirmed that he believed that article 49-3 was no longer necessary and should be abolished.  He also wanted a clearer role for the opposition in parliamentary committees, where much of the debate on legislation actually takes place, including naming the President of the Finance committee, probably the most powerful and influential committee in Parliament (similar to the Treasury Committee in the UK Parliament or Ways and Means in the US Congress) be named from the opposition banks.  Didier Migaud, a Socialist is the new President of the Commission, and although this Fabiusian has been a long-time member of parliament without attracting much attention up to now, his first outings in the media in his new role show him to be cautiously optimistic about his influence.  He is certainly no Sarko-convert, yet nor will he attempt to block every measure (indeed, his power as President of the Commission may be more symbolic than real when it comes to day to day measures).

At the same time, the policy of openness has been extended to nominations in the form of the surprising news that President Sarkozy wished to propose that the EU support the candidacy of Dominique Strauss-Kahn as head of the International Monetary Fund.  The EU has traditionally been allowed to have the IMF board appoint its chosen candidate as head (the US being left with the job of appointing the head of the World Bank).  At the EU meeting of Finance Ministers where Nicolas Sarkozy went in an unprecedented move to argue his case for laxer deficit policy (he needs the money to pay for his tax reforms until 2012), Sarkozy shored up support for DSK - the nomination now looks likely.  Despite a peak of indignation by the Board of the IMF today that "any member country can propose their candidate for the directorship", DSK's nomination looks like a safe bet.  DSK himself has been noticeably silent about the offer until he confirmed it quietly today, but this economist is thought to have given the President a green-light to move forward with his nomination weeks ago.

The opposition to the openness policy has been firm and indignant, and comes from two sources.  Firstly, and unsurprisingly, the Socialists are outraged that their members are being poached by the Great Enemy.  Not only have Kouchner and Bockel been given government jobs (two leading lights of the party that have always been out of place in the ideological struggles due to their Blairist outlooks on policy), but Fadela Amara scooped a Junior Minister role has been something of a modern icon within the younger Socialists - she is a famed campaigner and one of the few national figures amongst French-North African women.  Jack Lang, an iconic figure after his days as François Mitterrand's Minister for Culture, and one time pretender in the Socialist primaries has apparently decided to accept a Presidential mission and will draw up a report on the Fifth Republic's institutional framework.  Hubert Devrine, former Socialist Foreign Minister will write a report on globalisation.

Now DSK, one of the men who would surely have been a challenger to Segolene Royal's attempts to take back the party next year is unavailable too.  DSK was the leading light on the "progressive" (if not to say social-democrat) right of the party, but had indicated to some that, following his brush with defeat in the Legislative Elections, perhaps it was time to cede the ground on which he has so nimbly stood on since the early 1990s to someone else.

The second group to be frustrated at the policy of openness is Sarkozy's own camp.  Those frustrations were given a voice in the form of Patrick Devedjian, who when fighting for his own juicy position (he was unsuccessful) argued publicly that loyalty should not be seen as a disqualification for a government post when the first Fillon government was named.  As the number of posts awarded to "the other side" has grown, so have the numbers of frustrated MPs who are realising that the jobs are running out and they may have to contend with their deputyship.

Both sides are wrong to criticise the policy, if for somewhat different reasons.

The Socialists have never been more divided and rife with conflict than now, and the policy of openness enables them to clear the decks of the older generation.  Kouchner, DSK, Lang and the rest may not have been able to contribute anything to the party other than a potential extra leader.  Cutting down their numbers enables real power blocks in the party to form and a real contest for the leadership to begin in time for next year, ideally between 2 or at the most 3 candidates.  Royal will certainly be one, although she will have to do better than the rather bizarre interview she gave at the weekend where she spent much o the time either giggling or staring into space.  With the party establishment cut down to a more reasonable size, the younger generation will also accede into the upper ranks more easily, giving the party a refreshed image - one that is badly needed.

The UMP are wrong to criticise openness because things aren’t nearly as bad as they seem to think.  Look closely at the big jobs that have gone to Socialists and Centrists in the government: Defence and Foreign Affairs are two roles where the Ministers concerned are reduced to the role of Presidential Assistant.  Even now, Sarkozy is in Algeria discussing foreign policy whilst Bernard Kouchner is off preparing the ground for future Sarko-shows abroad.  Amara has been coupled with the combative Christine Boutin as her boss, hardly likely to allow Socialist spending sprees on Town Planning policies.  Lang and Vedrine have been given long reports and wide remits with no guarantee of any action at the end of it all, a situation likely to make the authors feel jolly important, but unlikely to influence government policy to any great extent.

In addition to parking some of the leading lights of the left into a proverbial lock-up for a couple of years, the UMP also have a great advantage over the party over the next few years, precisely because the poaching of the best talent means that the opposition will be headless for a good deal of time yet.  Although the PS may finish refreshed and rejuvenated by the decapitation that the openness policy has violently set in motion, the party will necessarily be inexperienced and disorientated.  For how long is unsure, but one only needs to look to the British Conservative party where a routing in 1997 led to a general changing of the guard - similar to the one occurring in the PS now.  Only now, ten years later, is the party looking remotely electable, in part due to an appalling public image, but also to mistakes made by an inexperienced team.  The Socialists may be five years into their journey in the wilderness, but they have shown little or no signs of having learnt the lessons of 2002.  The dearth in public debate coming from the Socialists, something of a figure of the past five years, has enabled the UMP to drive public debate.  Stealing their best brains and allowing Socialist ideas to be presented in big reports that the government will mull over with serious faces (and then in all likelihood ignore) enables the UMP to pinch the best ideas from the other side and to continue to drive debate in a bipartisan manner.

The UMP has much to gain from the void created by the decimation of the Socialist Party's leading brains.  And if they know how to handle the aftermath, so might the Socialists.

The PS is searching for meaning. It has taken a good look around Europe for guidance, particularly to Germany and Spain where successful Socialist Parties have maintained power, either in coalitions or outright governments. Zapatero, Spain's Prime Minister, spoke at one of Royal's keynote rallies during the First Round campaign and made a great show of his support for Royal. And yet the PS in France is often considered to be lagging behind its European counterparts. Leaving to one side Tony Blair (and from this week, Gordon Brown) and the British Labour Party, sympathy for whom has always been anathema to the PS base, these are parties that are regarded by the Socialists in France as friends, but the PS platform is at odds with their views. The PS has never dealt with the advent of a full market economy which was arguably not achieved in France till the mid 1980s with the abolition of price control. The policies that Segolene Royal criticized in an interview with cable news last week were similarly at odds with market forces: a huge rise in the minimum wage and the generalization of the shorter working week to 35 hours with no corresponding loss of pay. These ideas are fiercely popular with the base of the party: not the fickle middle class bourgeoisie that was so easily tempted by Francois Bayrou before the first round of the Presidential race, but the public sector workers and working classes that are generally if not fiercely anti-capitalist, suspicious of the private sector and all that it entails.

Voters however seem to be overtaking the base of the party. The old dogma is still more powerful and persuasive in France than elsewhere, but more and more of the electorate is deconstructing the left's argument that the market holds nothing but woe for the ordinary worker. Many voters considered raising the minimum wage a silly idea: employers would simply respond by sacking workers and closing factories. Similarly, workers did not believe that extending the 35 hour week to very small companies was credible, even if as a result employees would get more time. Surely wages would simply be depressed as a result, an effect seen by some following the first 35 hour week laws in 2001 and 2002. The economics of the Sarkozy work plan may have been a little wonky, but the Socialists were seen as barking mad.

The noisy resignation of the PS economist Eric Besson, now a junior minister in Sarkozy's government, only cemented the PS's weakness on the economic argument. Royal's speech at the beginning of her campaign focused on the problem France faces with its colossal national debt, yet nothing to tackle that problem was ever suggested by the Socialists. Economic credibility failed to attach itself to Royal and her inner circle. Money was to be dolled out on expensive socially minded pet projects, but precious few additional revenue sources were identified. In the end, against what appeared to be a more robust plan from Sarkozy and the UMP (although only time will tell whether that judgment was accurate) the voters deserted Royal and the PS.

Following the defeat in the Presidentials, Dominique Strauss-Kahn and Laurent Fabius began to call for a refoundation of the PS and its ideology, although as was established in the PS primary debates last November, they have very different views how this should be done. Both have launched attacks on the method and style of Royal's campaign and are squaring up to run against her in any race for the party leader in 2008 when the beleaguered François Hollande steps down.

Further evidence for the mid-life crisis the Socialists are blundering through can be seen with their choice of bed fellows.

The Socialists have traditionally allied themselves with the Communists, random leftish groupescules and the Greens. Those parties have gradually disappeared from the electoral map leaving the Socialists with a big electoral deficit compared to the right. The new suitor on the horizon is the young and sexy MoDem party from François Bayrou. Although a centrist party, Bayrou had appeared more open to the left than the right (he famously would not say who he voted for as President but confirmed that it was not Nicolas Sarkozy). However Segolene Royal's repeated attempts to form some kind of deal with Bayrou were spurned, publicly and to much derision from her Socialist colleagues. DSK makes no secret of his desire to jump into bed with Bayrou, and Bayrou does not hide his admiration of DSK. Fabius would have a harder time forming any alliance with the centre.

Although many aspects of the above analogy may seem a little abstract and laboured, one is painfully precise: the break-up. Segolene Royal and François Hollande, party boss for another year at least, have declared war on each other. Royal has fired the first salvos with her disavowing the more left wing components of her own platform (despite the fact that she was on the committee that drew up the Socialist programme in autumn 2005). Hollande is hampered by the fact that everyone is already acting as if he has left his job.

This week, DSK, Royal and Fabius resigned from the National Office of the party, the body that runs the day to day affairs of the party. They are squaring up to do battle once again. Fabius has been re-energized by his kicking off Socialist criticism of the Social VAT measure, and DSK by his comfortable win in his legislative constituency. Royal on the other hand has already won a primary against them once. Can she do it again?

If she is unable to lead the party out of its ideological cul de sac, arguably she shouldn't win. She proved that she couldn't mould the party to her image once: can she bring an end to the party mid-life crisis this time around?

Une petite information intéressante publiée aujourd'hui sur le site du Monde: Dominique Strauss-Kahn déclare vouloir quitter prochainement le bureau national du PS. Le journaliste et chroniqueur de RTL, Jean-Michel Apathie, est le premier à avoir lancé l'information, sur son blog, avant que la nouvelle soit confirmée par les proches de l'ancien ministre, d'après le Monde, qui ajoute:

"D'ailleurs, a déclaré M. Strauss-Kahn selon le journaliste, je vais donner l'exemple (...), je vais démissionner prochainement du bureau national du PS." Selon la même source, il précise que cela "ne l'amuse plus" de "passer deux heures pour savoir où on va mettre la virgule sur un communiqué que personne ne lira". D'après Jean-Michel Apathie, M. Strauss-Kahn aurait indiqué que ce départ interviendrait "à la rentrée". Précision sur laquelle son entourage met un bémol, en assurant qu'aucune date n'a été fixée et que ce sera "quand la question se posera, peut-être à la rentrée" – ou plus tard.

L'info est tout de même surprenante puisqu'elle concerne un des "éléphants" du PS, à qui l'on prétait des ambitions énormes, au lendemain de la défaite de Ségolène Royal. Alors trois hypothèses.

Ecartons d'ores-et-déjà la première: DSK est sincère. Etant donné l'état dans lequel le PS se trouve, même s'il s'est avéré que dimanche n'a été qu'un demi-échec, et non pas un échec total, Strauss-Kahn a tout à gagner à se mettre en avant. Il s'agit de l'une des seules personnalités capables de mener la gauche en 2012.

La deuxième hypothèse: celle de la traversée du désert. Il s'agirait de battre en retraire, de ne pas s'opposer systématiquement au gouvernement Fillon II, sachant que les Français n'aiment pas forcément cela, et apprécieront encore moins si les actions de l'Etat s'avèrent en plus efficaces. Se concentrer sur Sarcelles et cette circonscription qui a donné à DSK le plus haut score de sa carrière politique: voilà ce qui pourrait avoir du sens pour le socialiste qui n'est sans doute pas indifférent à la popularité d'un Bertrand Delanöe au niveau national. De plus, nul ne connaît la tendance qui s'imposera lors des municipales de l'an prochain. Pour survivre, vivons cachés.

Troisième hypothèse, ma préférée, et que j'ai déjà formulée ici et ici: DSK ne se représentera pas tout simplement parce qu'il ne sera plus membre du PS dès l'année prochaine. La logique politique - à considérer que cela ne soit pas une contradiction en soi - voudrait que des personnalités comme DSK et Bayrou soient dans le même parti. D'ailleurs, une étude du CSA a démontré que la connection politique entre le MoDem et le reste du spectre politique français se faisait résolument à gauche, 55% des électeurs du MoDem au premier tour ayant voté à gauche au second tour, contre 28% pour la droite.

Cela laisse penser qu'un positionnement au centre gauche pour un parti réunissant des personnalités libérales, voulant proposer à la France une alternative à Sarkozy, a toute sa place. Cette perspective est d'autant plus attirante que ce même parti pourrait prétendre jouer un rôle bien plus constructif que le PS actuel - du moins dans la forme qu'il prend aujourd'hui - dès lors qu'il sera ne pas s'opposer systématiquement, contribuer aux réformes et à la modernisation en tant que contrepoids et moteur, et non pas agir comme un obstacle.

La demi-défaite législative de la gauche n'a fait que ralentir la scission inévitable du PS. Le MoDem, qui a contribué à ce ralentissement, sera peut-être le principal bénéficiaire de cette rupture. Mon intuition est que DSK sera le premier déclencheur de ce mouvement vers le centre et de la décomposition du spectre politique français en trois grands pôles.

The UMP's  number of seats drops from 356 (plus the UDF with 27) to approximately 345.

The PS's number of seats rises from 140 to 206.

The Communists drop from 21 to 18.

The Greens go up from 3 to 4 seats.

François Hollande looks relieved this evening, knowing that he has at least gained a little time to start the arduous job of re-building his party. Dominique Strauss-Kahn was also delighted after scoring comfortable victory over his UMP challenger and launched his salvos at the current party executive. Everyone, even Fabius who has rediscovered his voice after another comfortable victory, his talking about refoundation of the PS. Unfortunately, how is going to be a little more complicated.

The defeat of Alain Juppé, the number two in the government and the head of the flagship Environment and Sustainable Development Ministry, is the biggest shock of the evening. Juppé, a controversial Prime Minister in the 1990s went into self-imposed exile in 2005 when he was sentenced to a year's ineligibility for a role in the fictitious employment system that served to fund political parties in the 1980s. He returned last year and was immediately and comfortably elected to his previous role as Mayor of Bordeaux, France's 3rd city.

After rallying quickly to Nicolas Sarkozy despite his role as a longtime disciple of Jacques Chirac, he was pipped for a frontline post in the new government. Despite the fact that he was hoping for the Speaker of the National Assembly, Sarkozy co-opted into a re-enforced environmental position, following something of an environmental epiphany whilst he was in Canada in 2005. He was considered to be sincere, devoted, but most importantly he had the authority necessary to give a real credibility to the post.

Now he is out. The Prime Minister had stated clearly that any ministers running for elected office would have to resign from the government if they were beaten. Juppé has confirmed this evening that he will resign from government and even suggested that he may resign as Mayor of Bordeaux. The President will now have to replace a man that many, even those who are members of the environmental lobby, considered irreplaceable. Nicolas Hulot could possibly be someone with enough clout to do the job, but it is unlikely that he would want to step into front line politics in these conditions considering his behaviour during the Presidential campaign.

The new majority is playing down the extent of the size of the PS majority. They are pointing out, fairly, that this is the first time in twenty-five years that the French have returned a parliamentary majority instead of booting them out. They point out, also fairly, that they have an absolute majority and nothing can impact on the trust placed in the President by his score one month ago.

In any case, the knives are out in the UMP amongst the unhappy few who had expected to ride the blue wave into the National Assembly, such as Renaud Donnedieu de Vabres, former Culture Minister under de Villepin, who this evening claimed that the announcement of the Social VAT measures was incompetently organised and cost him his skin. He is unlikely to be the only one, and Juppé's entourage are certainly likely to use the VAT issue as an excuse for their own candidate's short-comings. Others such as Arno Klarsfeld, the ultra-trendy lawyer who is a close friend of President Sarkozy who has failed to gain a seat in central Paris, and Alain Carignon, mayor of Grenoble and a former minister himself in the early 1990s, will be angered by their defeat in unexpected conditions. VAT - three little letters that are circulated in UMP offices across France tonight. This evening may indeed have killed the policy stone dead.

The PS this evening have learnt a valuable lesson: read the opposition's programme and find its weaknesses. It is somewhat startling that this did not occur beforehand (witness the ineptitude in attacking the deductible amounts from health insurance) but the PS has spent much of the last five years navel-gazing and it was perhaps too much to ask that they break the habit for the elections. Tonight, the PS have found one major weakness in the confused and contradictory statements around the social VAT plan: Elisabeth Guigou (Jospin's former Justice Minister and a respected but under-used PS cadre) this evening is milking it for all its worth in all of the TV studios calling it the "anti-social VAT" measure. They should get t-shirts done.

 After the massive voter turn-out for the Presidential Election in May, witness the disappearing election. 
The Legislatives were always going to be something of an anti-climax.  After a comfortable score in the Presidential race, Sarkozy secured 53%, his party, the UMP, were assured - if history is anything to go by - of at least a comfortable majority.  The early popularity of some of his long-promised policies and the flailing about from the MoDem - François Bayrou's new centrist party - and the PS - who are in search of someone to captain their sinking ship of pinkos and unreconstructed Socialists - only helped to push up the UMP's share of the vote in early polls.  Current polls (and there will be no more until Sunday's night and the results of the first round) show the UMP likely to grab more than 400 seats in the Assembly, with the PS picking up somewhere between 110 and 160.  The MoDem will pick up a handful of seats, perhaps 4 or 5, thus robbing them of a group in the Assembly and many of the funding and committee benefits that provides.  The Communists are likely to be cut to 1 or 2 seats after failing to secure any kind of electoral deal with the Socialists; the Greens too will see their numbers slashed for the same reason, only holding out in a couple of cases where media-friendly Greens are running unopposed by the PS.  The Front National is unlikely to make any headway due to its pathetic performance in the polls - its numbers are as low as they ever have been since the 1980s.  The rest of the seats are likely to go to the Progressive Radical Left and the Movement for France - two small centre left parties that secured a favourable deal with the PS.

The impending "blue wave" is not enthusing the electorate however.  The UMP has started to worry that a certain amount of complacency by the electorate could mean that their voters stay at home thinking they are not needed.  At the same time, many voters may need to be reminded that there is a second election this weekend, for the campaign has been somewhat muted in tone.

To be fair, this is despite the best efforts of the opposition parties, who have spent most of their time trying to break through the media buzz that has surrounded the avalanche of activity of the newly elected President, who has started, well, governing.  Nothing too shocking in that you would think - except that traditionally, Presidents have used the time between their own election and the installation of the new parliament to reflect, plan (even plot) the next five (previously seven) years.  Not so Sarkozy, who immediately set to work, with a frantic foreign policy schedule, and back to back meetings with unions and industry groups.

His keynote policies, the detaxation of overtime pay, tax deductible mortgage repayments, minimum service levels in case of strikes, a mini-treaty for the EU, have all be laid out and are being put in place.  Draft bills for two of the measures have already been published.  Most are likely to be up and running by the autumn.  The media frenzy over the examination of these policies - which has sometimes shown them to be lacking resemblance with the campaign promises (particularly in the case of a disappointingly weak and oddly considered deduction of mortgage repayment interest) - has all but drowned out the most vociferous of opposition forces.  The blue wave is steamrolling over any other colour with a mass of practical governing.

The opposition is also in pieces, still trying to work out why various parts of it scored the way they did in the Presidential Election.

Bayrou's new MoDem party is trying to find a raison d'être, and it is not proving easy.  The hastily cobbled together candidates in every constituency in the country are an odd mix or young professionals (who are inexperienced and often perturbed at the lack of warm embrace from the electorate), seasoned local council hacks who have enough back story to put their own parents off voting for them, and the small cabal of loyal Bayrou MPs who hold UDF seats but may lose them against UMP opposition for the first time (previously the UDF benefited from an electoral agreement whereby the UMP did not contest those seats allotted to the UDF).  Bayrou himself is struggling to get media coverage, most of the talk about his party centres on how badly it could do on Sunday.  Not an auspicious birth for the MoDem.

Meanwhile the New Centre Party, lead by Hervé Morin, previously a Bayrou loyalist and now turncoat as the Minister of Defence in Sarkozy's government (who has been entirely absent from the campaign except for the startling news that, in order to grab the maximum number of public campaign funds, most of his family, his secretary and his chauffeur are all standing under the New Centre banner), will exist in the new parliament thanks to an agreement with the UMP - however surely a de facto merger cannot be far away.
The Socialists have decided, as they often do, to concentrate much of their firepower on their own figures.  After attempting to right a sinking ship, François Hollande, beleaguered party chief, confirmed last week that he will not run for the leadership of the party again when his current mandate expires in 2008.  However he also did not indicate that he would be leaving before then - much to the chagrin of his colleagues that fancy the job themselves, particularly his partner and failed Presidential candidate, Segolene Royal.

Royal had urged Hollande to make way, unsuccessfully, but has confirmed that she would stand for the leadership when it becomes available.  She is, according to her inner circle, not encouraged by the job as it currently stands - the First Secretary has far too many administrative type jobs - and she would prefer to change the Party statutes to create the role of President, where she could symbolically lead the party as its natural candidate for the Presidency in 2012 whilst someone else does the political backroom negotiating as First Secretary.

Hollande's stubbornness in clinging to the job he will have had for eleven years may do catastrophic damage to the Socialist Party.  Already, and despite the hope that the Legislatives would focus the minds of those involved, the in-fighting between different warring camps (principally lining up behind DSK and Royal with Hollande and Jospin's former supporters somewhere in the middle) has reached fever pitch.  Royal is planning on playing the long game, hoping that the rumours that DSK and Fabius are seeking jobs in the private sector to quit politics are true, or become true over the next year.  She seems as determined as ever to cling on to her role as the spiritual head of the party, and now wants to consolidate that power.  If the Legislatives go as badly as expected, expect little change until the departure of Hollande, for no one will be surprised by the disaster, and claim that the Sarkozy Effect has merely hit them twice.  If the defeat is worse than expected (say the party only gets 100-120 seats) then expect a ratcheted-up attempt to unseat Hollande.

In any case, the consequences for the Sarkozy administration of all this to-ing and fro-ing are likely to be close to zero.  The chief concern must be for the French however, that in the event of a weak opposition, a government with a massive majority rarely does that good a job.  Incompetence breeds within the molly-coddled ranks.  Nepotism becomes the norm.  And blindness as to public opinion becomes a raging disease.  France needs a strong PS - but the PS does not seem to be ready to do the job.

Voilà une tendance évidente et lourde qui se confirme: un parti qui réunit un homme comme DSK - et autrefois Kouchner - ainsi que des Fabius, Mélanchon et Weber n'a pas d'avenir. La fracture s'était faite ressentir depuis le débat sur la Constitution européenne. Cette fracture est profonde et s'avère tout aussi déterminante que la fracture droite-gauche traditionnelle. Kouchner le considérait déjà et est allé au bout de sa logique en entrant dans le gouvernement Fillon I. DSK, qui a choisit une autre stratégie, ne fait cependant confirmer qu'un état des lieux évident. Les jours du Parti socialiste tel que l'on connait aujourd'hui sont comptés.

Les débuts du MoDem s'annoncent chaotiques et les sondages ne créditent pas le mouvement de plus de 15% des voix. Mais la vie politique française va s'en trouver revitaliser, avec une nouvelle donne politique bien plus cohérente. Les militants socialistes auront véritablement le choix entre deux tendances incompatibles: l'une ancrée profondément à gauche et fossoyeuse du Traité constitutionnel, l'autre libérale, ancrée au centre et profondément européenne. Cette clarification du débat rendra plus transparente les réelles tendances politiques au sein de la société française.

For what seemed a fleeting moment, the sheer horror of the odds stacked against the PS in the Legislative Elections appeared to have concentrated minds. After Segolene Royal's Sunday night offensive where she sought speedily to appropriate the leadership of the Socialist Party, the other so-called Elephants (the leading historical figures who owe their notoriety to a stint in government from 1997 to 2002) started sharpening their knives, attacking not only the campaign run independently of the party by Royal's team, but also the stewardship of the Party by Francois Hollande, Royal's partner and father to her children.

Dominique Strauss-Kahn was most vocal in his attack of Francois Hollande's stubbornness.

It has been almost 6 years since he took the reigns of the party and yet the party's stance on issues has either stagnated, or worse, grown more confused. Many French simply fail to understand what the PS stands for. DSK favours rebuilding the party from scratch and creating an ideological base of the party on a more centrist, so-called social democrat footing: reconciling welfare with free market economics. But although many call for change, it is not entirely clear what direction the rank and file of the party want to go.

Confusion abounds amongst the party activists about the future direction, indeed the very future, of the Party – important as the party relies on these now disaffected gophers to do much of the legwork in the Legislative campaign. There is one group who seemed to have been spared: the hard core supporters of Segolene Royal, but they are loyal to her and not the party, and may not view a crushing defeat for the PS in the National Assembly, as a problem for their idol's candidacy in 2012.

And their greatest desire could be the one thing that pulls the party together again: power. The PS is hungry to be back in power, nay, desperate. Not for them the tactics of the extremes who love to shout and protest but spontaneously combust in a puff of immobilization or mismanagement (the FN and the Communists respectively). The parallels between today's PS and the British Labour Party of 1992 are startling. Both had been out of power for years (the PS is facing a total of 10 years by the next election). Both suffered from imperfect leadership and a muddled ideology that no longer had any resonance with even the core voters of the party. Both seemed ready finally to change if teased with the prospect of enduring years in government. It took Tony Blair to bring Labour to power for an unprecedented 10 years. The question is who will play the role of Blair for the Socialists in France?

The great risk was that, creating an artificial turning point in the campaign by stating that the participatory stage would come to an end on February 11th and that the manifesto would be announced then generated a huge amount of anticipation and expectation. Did it pay off?

Tonight, we can say yes. The media has clearly jumped on the bandwagon with "Campaign Turning Point" plastered across our screens. Long criticised for not having enough policies, Royal unveiled the Presidential Pact with 100 proposition, most of which are sufficiently clear and precise to satisfy even the most pedantic critic. We know where she stands, but was she able to tell us what she stands for?

Her speech was preceded by François Hollande, her partner and party boss. He is shaping up to be Segolene's attack dog throughout the campaign. Royal never stated her chief opponent's name; Hollande never stopped. Sarkozy was savaged. Hollande's speech focused on a critique of Sarkozy's emphasis on "working more to earn more". He savaged Sarkozy's idea to make it cheaper for employers to pay overtime arguing that making employees work more dissuades employers from hiring. An unfortunate stumble (employment is not a zero sum game), and unnecessary, as Lionel Jospin had emerged from his sulk this week to criticise Sarkozy much more effectively on precisely this point, by stating that encouraging people to work overtime is all very well and good, but an employee cannot decide himself if he is going to work those extra hours.

Hollande criticised the selective tax cuts and the tax shield at 50% benefiting the rich and only the rich, and also pointed out a few more of the holes in the UMP/Sarkozy tax policy, such as the mused increase in VAT which would disproportionately affect the poor, and the deductible amount in prescription and other health charges. In his slightly stumbling, slightly awkward manner, which explains why there has never been a presidential movement behind him, he effectively gave those in Sarkozy's headquarters, something to explain, some riposting to do. And then he introduced Royal.

She was late, and the crowd that had turned up to hear her (5000 were initially expected - then the venue was changed to allow for 8000 - finally 16,000 arrived) was restless. She is an awkward speaker too; far from a born orator. She relies on her notes too much (can the party not afford a teleprompter?) and she has a habit of drifting into a monotone. But the speech lasted two hours, and she survived the marathon, even becoming more natural and passionate throughout the speech.

What about the contents? The big surprise was that she started off with a mention of the enormous public debt that currently burdens France (a result of the economic incompetence of the current government). This was interesting as there is a general feeling that all the candidates' promises are ignoring the fact that the country is already having trouble paying for things, and each candidate's programme is being examined closely to see if the sums add up. It sounds responsible, evoking the debt, however it is unlikely that made are going to be motivated by something as dry as fiscal conservatism.

Some of the keys of her speech included crowd-pleasers such as a 10% per year increase in budget for research and development (France lags behind other Western economies in this aspect); free loans for young people designed to help them start up a business (again, the French have lost their entrepreneurial spirit due to the costs involved in crossing all the Ts and dotting the Is when registering a business); a youth benefit to allow young people to establish some independence from their parents (but would that create a dependency on the state?); a guarantee that no one should earn less by taking up employment and letting go of their benefits; increasing the number of housing to be built every year and beefing up the powers of the state to intervene and build more social housing where locals oppose the move. But there was a surprising amount on foreign policy too, with an innovative focus on Africa, and Mediterranean co-development, which is correctly identified as the most effective way to deal with the flood of illegal immigration.

In general, she was credible and effective. She spoke as a mother, often mentioning that she was increasingly concerned that her own children were growing up and going out into a world that was more dangerous and uncertain than the one she grew up in. It is unusual for French politics to her the words "As a mother..." from a politician. The French are going to have to get used to it.

The political impact of her speech will be to add substance to the bones of what existed before: a general impression that the French did not know what kind of President she would be. Considering that she has come from nowhere in the last three/four years, it is remarkable how she is able to occupy the French psyche. The next test will come over the next two weeks. Will she be credible when explaining her 100 propositions? She has not shown up to now the same mastery of the detail that Sarkozy exudes - there will be plenty of opportunities for things to unravel once more.

Sarkozy was out today with a keynote speach on the subject of openess - André Santini, the cigar smoking centrist mayor of Issy-Les-Moulineaux, a techo-centred suburb of Paris, annouced that he was snubbing his party's official candidate, François Bayrou, and voting Sarko.  Sarkozy is working hard on shedding his image as a man on the hard right, a man that is inflexible.  There is concern amongst those who advise Sarko on his image that he may have trouble keeping enough of the centrists and centre-leftists on board to tip him over the 50% mark in the second round due to his devisive nature.  They are right to be worried, and it may take more than wearing the odd-polo necked shirt to shed his image as the man who takes no prisoners.

The risk of February 11th has paid off - the French are listening, they are looking at the options, they are deciding. The opinion polls will likely narrow, with a bounce for Royal following today's speech. The game's on.

Being of a right of centre persuasion, Jacques Chirac decided to announce a reduction in income tax of around one third during the campaign in 2002. Partially implemented in 2002, the government then wavered, faced with a rising deficit. Villepin in 2006 announced that a further tax cut would be introduced in 2007 with immediate effect, a measure criticised as a sop to the wealthiest amongst tax payers, those in the top two brackets.  A keynote measure, the bouclier fiscal, was also introduced to cap all tax paid by an individual at 60% of their total income, to prevent very high earners from paying over the odds when all of their various tax bills were combined.  Sarkozy now proposes to boost the tax cap to 50% of all earned income.

The Socialists have fought back against this barrage of electoral freebies.  Unfortunately they do not appear to have coordinated their messages, and a rather interesting dispute has opened up between Segolene Royal and her partner François Hollande.

Hollande, allegedly espousing the PS party manifesto (which Royal signed up to incidentally), stated bluntly in an interview with Le Figaro newspaper, that the tax cuts from 2002 and 2007 for the highest earners would be scrapped and that a new form of direct taxation on income may be necessary (adding to the existing social contributions which represent already about 20% of the monthly wage packet of employees).

Royal, furious at this blunt honesty which could cost middle class voters, riposted, stating that there would be no additional taxation of "work" - translated that means that direct contributions and income tax should not go up.

After a little to-and-fro, the journalists, baffled at these contradictions, established that Hollande was speaking in a purely personal capacity as part of the participatory section of the campaign.  Hollande, perhaps a little grudgingly, nodded at this explanation.  Odd, as his original statements had been unequivocal, and seemed to have no regard for the electoral impact of what he was saying.

The affair exposed what many had long suspected: the tax proposal contained in the PS manifesto are electoral suicide, and there is no tax policy ready to be presented as policy.  Royal dispatched Dominique Strauss-Kahn, probably the best economist within the left movement, to develop some ideas.  However, his enthusiasm faded for the task when he realised that it was more of a diversion than the establishment of a policy platform.  His ideas have since disappeared from view, him with them.

Meanwhile, on the right, a barrage of new measures is being launched, and the French like the look of them.  Not only is Sarkozy keenly focussed on taxation, constantly launching seering attacks on the left who he claims want to tax more the most heavily taxed society in Europe, but also Chirac who discovered the taste for tax-cuts in 2002 and has just announced that he thinks its a good idea that they continue.  Continued lowering of income tax and generaly simplification of the system, no taxation or social payments on overtime hours paid, lowering of business rates and the simplification of business creation.  What they haven't announced of course, is how they are going to pay for this all.

One thing is clear: the fiscal conservative, be he of left or right wing persuasion, is a dieing breed in France.

Largely seen as a positive experience for a party that found it somewhat difficult to get into the news since 2002, the primaries have opened the PS up to the public. Most people now know what the PS stand for, who the leading lights are, and why or why not it may be worth voting for them in 2007. Half the job of the election campaign is thus done: France has sat up and is listening. Now all that is needed is someone to tell them the message in an effective way that breaks with the past traditions of patrician-like preaching and simplification which PS campaigns are known for.

But who to lead it? Royal is still, according to whispers at party headquarters, likely to walk away with the prize tomorrow evening. Feeling the tension, despite their own satisfaction at their respective performances, DSK and Fabius started the week with vicious counterattacks.

One of DSK's supporters allegedly released onto the internet a video clip of Royal apparently criticising teacher for skipping hours at school to teach private lessons on government time. The video caused some impact amongst teachers unions. There was guarded criticism and dismissal of the comments, however Royal was education minister in a former life, and is actually quite knowledgeable about the subject. She is also well respected by the teaching world. They also were fairly understanding of the Royal argument that the video was craftily cut - minutes later Royal railed in her talk about the lack of money teachers have at their disposal to do their jobs. What did cause outcry and provoked very stern criticism were the tactics used in the placing of an edited video from a private discussion amongst party members in January onto the internet in such a crass attempt to dent Royal's popularity. Fairly convincing evidence suggests it was one of DSK's over-eager Lieutenants - he himself has denied all knowledge and there is nothing to suggest that he would have been the instigator of the action. The polemic died down after a few days, only to spring to life once more yesterday.

Royal's supporters, evidently fed up of months of taking punches whilst being instructed firmly to refrain from punching back, reminded the media that DSK and Fabius were nothing but sexist macho pigs who had sneered at the idea of a woman candidate from the start. Fabius is famously alleged to have said "But who will look after the children?" at the idea of Royal running. Fierce denials flowed freely from the DSK and Fabius camp. Which was exactly the plan. The two men spent the last day of the campaign talking about Royal.

In any event, the campaign is limping towards its conclusion. Everyone is tired, suggesting that politics may take a little break for the rest of the month, to kick off again before Xmas when the UMP gear up to confirm Sarkozy's election as their candidate. But the primaries have taught valuable lessons. The French have learned that the Socialists do have some new ideas (not all good, but there is time, precious time for refinement). The Socialists have learned how to run a campaign, mainly by laking so many mistakes in the last couple of months. They will need to control the message, formalise policy review, better manage the media and the loose cannons within and ensure that they spend time talking about their programme and not succumbing to the oh-so-easy bouts of Sarkozy bashing that some have a tendency for. Royal more than anyone has shown that she can command the agenda, although it could be said that much of her domination has been by chance or accident due to mishandled policy announcements.

The biggest question is what happens when the dust settles? After the bitter rancour, can the PS pull together? They never have before. Could this time be different? If there is a decisive win by Royal at the first round, then I believe that the party will either pull together or stare death in the face and collapse. If Royal does not win at the first round, it is anyone's guess. One thing is certain though - if the PS cannot get it together, Sarkozy should start measuring curtains in the Elysée Palace now.

Ostensibly dedicated to "questions about society", a handy catch-all enabling the interrogators to lob questions about recent statements that have made the headlines, notably those by Royal on popular juries of citizens to render judgment on elected officials and Sarkozy on his attempts to more severely punish those who are convicted of assaulting police officers and emergency workers.

At frequent intervals throughout the debate, it was clear that the candidates were feeling restricted by the nature of the questioning.  Ever attempting to pull them back to a precise question about what had been in the news this week, the candidates kept on trying to surf above the headlines of the last 48 hours and give the audience more of a general impression of their philosophy.  This is not avoiding the question in its typical sense: the President will not be elected to comment on the news for five years: he must demonstrate that he has over-arching philosophies that can guide his action throughout his mandate.  The questions thus were not suited to the exercise and did not help to relax a charged and aggravated atmosphere.

So why were the three so bitter?  Primarily because of Royal's popular jury idea that made something of a splash (of mainly derision and criticism) over the weekend.  Her idea is that ordinary people could be selected to report on the progress made by their elected officials.  This would not necessarily terminate in a power to punish those officials, the information could merely be placed at the availability of the voting public and they could decide what to do with it.  needless to say, many elected officials themselves were nervous about such a move.  The right descried a simplistic and ill-conceived gimmick, the left, including Strauss-Kahn and Fabius said that it was incompatible with a representative democracy and anti-Republican.  Much of their argument focused on the fact that the details of this measure were not clear and if the details of the measure were X then the results would be Y etc etc.  Although the debate was fruitful, and Royal managed to defend her idea with a robustness yet unseen in her, her opponents also missed the point.  They could only criticise the measure by inventing details that Royal had not given them.  This will then enable Royal to criticise their criticism later by stating that the details of the measure are completely different to those criticised, and thus the measure she finally comes up with will be the result of a consensus worked out during the debate.  Royal does not make policy statements, she floats them out over public opinion and then develops them depending on the input from the public discourse.  A prime example is her announcement several months ago of the creation of military-supervised training for young offenders.  After the volleys of abuse regarding the measure, it has been refined to the idea that the offenders would be sent on humanitarian missions supervised by the military.  Much less contentious and quite original.  This certainly took Fabius off guard who was robbed of a key point that he planned to use against Royal.

Fabius's strategy throughout the debate was clear: he went after he core voters.  Those on the left of the left were therefore pleased to hear all of the right sounds-bites from their man: secularism, liberal attitudes to immigration, suspicion of globalisation and high rises of the minimum wage.  Strauss-Kahn leaned more to the left in this debate too, clearly pleased by his bounce from the previous exercise and hoping to shore up a little left wing support.  Royal had the advantage of not needing to chase after any particular group of Socialists and so continued to transcend the debate somewhat, being careful to enlarge her message to the whole of the political audience.  It is very clear that Strauss-Kahn and Fabius are trying to win the primary, whereas Royal is using the exercise to lay the foundations for winning the election.  Is it too much too soon from Royal?  The first polls after last night are not out yet, but reaction is likely to be mixed.  The press seems to have decided that Royal came out of last night's debate weaker (although no clear winner is declared).  This alone could have a big impact of the public perception of Royal.

Fabius and Strauss-Kahn both performed admirably throughout the debate, they were precise, biting when necessary, and both clearly aimed at Royal.  And this may be the problem.  Both men have been warned of the potential disaster that awaits them if they appear to be "ganging up" on Royal.

Over the last couple of weeks, many in the party have been murmuring that the up and coming primary vote could be the PS's moment of truth in the campaign.  Whoever is chosen will probably face Nicolas Sarkozy on the right, who will have been selected by a crashing majority of his party - therefore the PS candidate should be similarly armed with over-whelming support from his party.  The plan would be therefore to ensure that one candidate wins over 50% of the vote at the first round, thus automatically winning the nomination.  The only candidate who stands a chance of winning that share of the party vote is however Royal.  The carrion call to party members is therefore "Vote Royal and give her the tools she needs to beat Sarkozy".

Jack Lang has also made a reappearance in the news, with the rumour that he will announce in a joint press conference with Royal, that he is throwing his support behind her.  Although he did not galvanise any support for his own bid, Lang is a well-respected and fondly considered member of the party and his support could be crucial to attracting an extra chunk of the left wing vote within the party to her.  Rumour has it, as discussed on this blog a couple of weeks ago, that Lang would be hoping for the Foreign Ministry if Royal was elected, although Royal's camp has rejected any idea of a deal for support.  Heaven forfend.

The preparations for the debate were not easy.  According to the President of the TV station on which the debate was aired (the obscure French equivalent to C-Span or BBC Parliament, rather than a nationally available channel) the first list of candidates demands at the rules of the debate would have made anyone want to burst out laughing, and then cry.  Naturally, negotiations hammered out fairly stringent rules which some say stifled the exercise.  No direct questioning between the candidates was permitted, although happily the journalists could ask follow-up questions to candidates weaseling out of giving clear answers - this in the event provided some of the best moments of the exchanges.  The result was a cordial and thought provoking serious of answers from candidates, rather than the normal shouting-across-each-other chaos that normally ensues in French political debates.  For once, we actually heard the candidates speak.

At this point, it should be made clear, particularly for American readers, that the level of debate was exceptional compared to standard English or American fare.  The candidates spoke of all the major economic and social issues with elegance and precision, discussing the merits and demerits of specific policies but also giving an idea of the bigger picture, a particular strength of Royal who described in simple terms (perhaps talking down a little too much - a point recognised by a satirical TV programme that depicts Royal spouting monosyllabic phrases in the hope that the French will understand) her ambitious new appreciation of the environment in constructing economic policy.  The level of debate, devoid of personal attacks or the typical "he said, she said" would frankly stun your average US Senator or British MP.  More credit to the PS for this entirely worthwhile exercise.

What did they say?  There were no shocks, no surprises.  All three candidates, as previously mentioned in this blog, have fairly clearly carved out their territory.  Fabius hung to the left, promising amongst other things the generalisation of the 35 hour working week and raising the minimum wage by an immediate 100 euros followed by subsequent rises.  DSK proned social-democracy without sounding too right wing as to scare off party members, but was overall much more cautious that Fabius when it came to expensive social policy, favouring wide scale negotiation on those matters.  Royal hung to the middle ground between the two candidates (which could be seen as something of a please-all-of-the-people-all-of-the-time tactic).  She came down in favour of reevaluating the importance of environmental policy in economic policy, correcting what she saw as some of the downsides of the 35 hour working week and questioning the wisdom of raising the minimum wage abruptly without tackling the problem of low wages in general (without actually formulating an answer as to how to do that).

Many were expecting Royal's relative inexperience at political debates, and alleged distaste for debating environments, to be her downfall, against two candidates who are strong debaters.  She remained relatively poised however, and although remained on a much more general footing that the other two candidates, this may have helped boost her presidential image.  The two men thus appeared to be very knowledgeable potential prime ministers, rather than painting the bigger picture in the manner of the traditional President (something that Chirac has excelled at in previous campaigns).  The detail therefore is not so much important as the idea of what kind of direction the candidate wants to take in the country.

The final question for the three participants was what differences existed between them.  The debate was unexpected in the fact that the candidates all said at frequent intervals that they agreed with one another on points made.  This, although rather peculiar between political rivals, actually reinforced the image of the Socialists as more or less united behind a policy platforms, with obviously some differences of emphasis (ie, imposition of social policy vs heavy duty negotiation with the possibility of not carrying the policy forward).  On the whole the atmosphere was courteous, cordial and refreshing.  It was probably a little too dull for the general public that was hoping to see a clash the likes of a normal left-right battle, but then, it wasn't really aimed at them.  The party members watched in significant numbers and the internal debates within sections of the party will be held this week and next.  Interestingly enough, when asked what message they wanted to send before the debate, DSK and Fabius both said they were addressing the party whilst Royal stated specifically that her message was for the country.  Royal continues to play the tactic of rising above the party and going straight to the people, thus increasing or supporting her already high popularity within the country, thus obliging those Socialists who do not naturally warm to her to consider her as a candidate because of her great potential to win the Presidency.  In effect, she is short-circuiting the primaries that, as a moderate, she would probably not be the favourite to win otherwise.

So who won the debate? This morning a national newspaper has produced a poll showing that DSK has had a small bump after the debate.  He is up to 32% amongst party sympathisers, compared to Royal's continuing dominance at 63%.  Fabius trails far behind at 5%.

After a fairly bumptious performance this poll is a disaster for Fabius and his support seems to be collapsing and transferring to Royal, whilst an element of her support may have transferred to DSK after his admirable demonstration of his intellectual prowess in the debate.  However there is much to the argument that Fabius's support is being massively underestimated by the fact that his base support at the left of the party simply hasn't been questioned by the surveys.

The next debate is on international and European affairs, and here is where Fabius is hoping that the No vote on the EU constitution can help him most.  DSK was firmly in the Yes camp and is thus at a disadvantage (the No, although only winning by a few points has since become the consensus amongst Socialists - even those who voted yes), but Royal, as ever, is more nuanced on the question, having proposed a modified version of the document without the "liberal" economics.

It is still Royal's to lose.

The debates start this week. There will be a total of three debates that will be televised although not on one of the national channels. This is despite an offer from the national broadcaster to host at least one debate. It is thought that Fabius was wary of giving Royal yet another platform to the wider French (the primaries being a strictly internal affair apparently). As well as the TV debates, there will also be three regional debates around the country in front of party members. The debates are anticipated as, at best an enormous and uncertain challenge, and at worse an almighty drubbing for Royal. She is seen as the weakest debater, up against the extensive experience of Fabius and Strauss-Kahn of this type of exercise. Many of the latter two's supporters are hoping that, with a restricted audience that may exclude many of the newer members that are thought to overwhelmingly support Royal, one of their candidates will deliver the fatal blow to Royal and her image amongst the wider public will be smashed by mainstream coverage which will focus purely on her gaffes.

Royal made it known on Thursday that her participation in all of the debates was not a foregone conclusion. Partly afraid of the exposure to a debating environment which is something of an unknown to her, and partly exasperated at the multiplicity of the debates (particularly the regional ones in front of party members which risk turning into quasi-engineered confrontations between Royal and the left of the left wing members of the party in the audience) Royal and her entourage tested the water for a tactical withdraw.

The water was cold and stormy. Other than Fabius and SK's predictable mockery, the right seemed to enjoy the idea that Royal was afraid of a fight. Hollande forced the final nail in the withdrawal strategy coffin, pronouncing that he saw the full round of debates as useful. On Sunday, Royal's supporters were faining disbelief at the media circus that they themselves had created and categorically denied that Royal would skip any debates.

Last Sunday, Hollande was also on television, proving that he has not (yet) resigned himself to withdrawing from the limelight in favour of his partner, and gave us some interesting clues about the future PS electoral strategy. This is important, as the winner of the primaries, even Royal, will not have the infrastructure, human or financial, to run a separate campaign and will be forced to turn to party strategists who were furious at being sidelined by Jospin in 2002.

Believing that they have learnt from the failure in 2002 (note that they overwhelmingly affirm that the mistakes made were not of their doing but of the Jospinian outsiders introduced into the campaign at the eleventh hour), Hollande reminded the interviewer, the very habille Christine Ockrent, that before one could win the second round vote, it was necessary to get through the first round, where the support of the electoral base of the party was key. Appealing to the centre was all very well and good, but it was precisely the strategy employed with catastrophic effect by Jospin in 2002. He famously stated, in a sop to right wing voters, that his manifesto wasn't really Socialist at all. The result was that a sizable chunk of the core left did not recognise him as one of their own and voted for one of the range of ersatz communists and trotskyists on the day of the first round, or simply exercised a protest vote in the form of the National Front. Frustrated at a lack of spokesman for the "governmental left" - the left that actually wishes to form a government, rather than seeks purely to be a form of political and social opposition - Jospin was robbed of an appearance in the second round.

Unlike the US elections, where the base can carry you only so far if the independant or centrist vote is mobilised against you, the French Presidency thus requires a strong base to get through to stand any chance of succeeding. Any attempt to play to the centre is thus viewed with trepidation, in the fear rhat core voters will feel betrayed. Royal is facing strong accusations, particuarly from Fabius, that she is running the second round campaign (appeal to the centre) before the first round campaign (appeal to the left).

It is clear that Royal's moral and political compass guides her more to the centre than the far left. What is not clear is whether the party cadres will succeed in jolting her back to the left if she wins the primaries. But her instincts could even betray before we get that far. One unfortunate result of the primary system in the US is the selection process itself ensures that only the most extreme candidates are selected in a system where a disproportionate number of voters in the primaries are more extreme in their views than your average Joe, being militant party members. The wider electorate thus gets a distorted choice to make on Election Day and becomes increasingly frustrated that their politicians don't look or act like them. Royal risks proving too moderate for her first electorate, the red flag waving, Internationale singing members of the Socialist party.

But wait, the press, and in particular the foreign press (which is subsequently re-reported in the French press thus doubling its media exposure), in typically shortsighted missives in the International Herald Tribune and the British Sunday Times, state categorically, over and over again, that Royal is way ahead in the polls. She is quoted as perhaps having as much as 50% support amongst left wing sympathisers. These figures, often contradictory as between surveys taken at the same time, often sourced from very few voters and almost never any party members who will be the actual people voting in primaries this month, have caused problems this week. The bottom line is simple: no good polling data exists on how the members of the party are likely to vote. I'm not entirely sure why that is the case, but it's the way things are. Fabius and SK can therefore at least reassure themselves that they are truly operating in the dark, and when you suspect you may be tailing, that can surely only be a good thing.

Then comes the sticky issue of discipline within the PS. Party discipline in France, the same as the US to a certain extent, has always been seen as an uncomfortable necessity that can be dispensed with on frequent occasions if the circumstances or personaliities required it. This is very different to British politics where discipline within the parties is much more rigorously applied (although its application is far from perfect as Tony Blair well knows). Primaries however change circumstances somewhat. So, considering that the PS is so inexperienced when it comes to primaries, which can only function if everyone stands loyally (and convincingly!) behind the selected candidate, what will happen once the candidate has been selected?

The current atmosphere is worrying. Cast your minds back a little: the internal vote on the European Constitution concluded with PS support for the Yes Campaign. Fabius subsequently ditched the party line and campaigned for the No vote, which eventually won. Fabius was briefly and somewhat symbolically expelled from high party office (but not the party itself) and then welcomed back into the fold little more than a year later. The primaries thus contain at least one candidate that has proved unable to tow the party line in a primary style atmosphere.

We can therefore anticipate that the selection of the candidate may only be the beginning of internal divisions in the PS. The primary battle between a certain Geroge W Bush and John McCain in 1999 and 2000 led to the latter losing the nomination in a tough and bitter battle. Once Bush was selected by the Republicans however, McCain showed scrupulous loyalty and devotion to the selected candidate's cause, because he understood that it was also his party's cause. If the PS cannot back their elected candidate and show a unified front in a similar way, they do not deserve to win anythng, let alone the presidency.