It’s a comforting fable, designed to excuse their own failures. It is, however, completely untrue. Neoliberalism wasn’t exported to Europe from across the Atlantic (or from across the Channel, for that matter). It was a largely homegrown affair — one that was, in fact, spearheaded by European Socialists, and by one Socialist in particular: Jacques Delors, President of the European Commission from 1985 to 1995, who died this week.

To understand this tragedy, we need not return to 1945, but 1981. In May, the Socialist François Mitterrand was elected France’s president, after more than two decades of the Left being excluded from office. He went on to form a government that also included Communist ministers for the first time since 1947, prompting a widespread belief that France was headed for a radical break with capitalism.

At the time, such a notion was not inconceivable. Most European governments still firmly believed in the importance of economic dirigisme and the need for capital controls and regulated financial markets, which presupposed a high degree of economic sovereignty. Nowhere was this truer than in France: the French had always been particularly reluctant to agree to any supranational authority — a consistent position that had hampered progress towards an economic and monetary union. In general, there was still the belief that individual nations had the power to shape their own economic and political destinies — and even to challenge the capitalist system itself.

Nothing exemplifies this better than Mitterrand’s victory in the spring of 1981. The new president’s policy agenda embodied an ambitious reform programme of Keynesian economic reflation and redistribution. It also proposed extensive nationalisations of France’s industrial conglomerates. By implementing this platform, Mitterrand claimed, his government would precipitate a “rupture” with capitalism, and lay the foundations for a “French road to socialism”. It’s easy to see why this represented a moment of immense hope not just for the French Left, but for the entire European Left — of the kind not witnessed since.

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Soon after the Mitterrand experiment began, however, it started to unravel. As a reaction to the Socialists’ ambitious plan for economic reform, capital started to flee France almost immediately. Despite the imposition of draconian capital controls, the government was unable to halt the flight.

This created a downward pressure on the franc (further exacerbated by the post-1979 global interest rate hikes), threatening France’s membership in the European Monetary System (EMS) — the system of semi-fixed exchange rates created in 1979. Under the EMS, the central banks of participating states had little choice but to shadow the Bundesbank’s restrictive monetary policy. Yet this was incompatible with Mitterrand’s reflationary programme — and Mitterrand found himself in a position where a decision had to be made about whether to leave the EMS or abandon his progressive agenda. Regrettably, he chose the latter path.

And so, in the spring of 1983, Mitterrand and the Socialists drastically reversed course, in what came to be known as the tournant de la rigueur (turn to austerity): rather than growth and employment, the emphasis would now be on price stability, fiscal restraint and business-friendly policies. A crucial aspect of this was the gradual rollback of virtually all capital controls and restrictions on financial transactions. And who was the main architect of this shift? Mitterrand’s finance minister, Jacques Delors.

The effects of this U-turn cannot be overestimated. Mitterrand’s victory in 1981 had inspired the widespread belief that a break with capitalism — at least in its extreme form — was still possible. Yet two years later, the French Socialists had succeeded in “proving” the exact opposite: that globalisation was an inescapable reality. Even though there were alternatives available to Mitterrand (such as leaving the EMS and floating the franc), the conclusion most people drew was that the “Keynesian road to socialism” had failed. Capital had won.

To make matters worse, the French Socialists, after having embraced neoliberalism at home, then proceeded to export their newfound views — on everything from capital movements to monetary integration — to the rest of Europe. Here, Delors was also central. “National sovereignty no longer means very much, or has much scope in the modern world economy,” he said. “A high degree of supranationality is essential.” This was a radical departure from France’s traditional souverainiste stance, which had already been seriously compromised by France’s decision to join the EMS, under which, as noted, the country was effectively forced to subjugate its own monetary-fiscal policy independence to the Bundesbank’s monetary policy.

For all of France’s historical concerns about supranational (that is, “European”) encroachment on its sovereignty on the one hand, and German hegemony on the other, few missed the irony of it being the Socialists who gave up that freedom — and to Germany of all nations. But by the late Seventies, French politicians on both sides of the political divide had come to accept that maintaining France’s status required them to remain firmly “in Europe” — that is, in the EMS — which in turn entailed adopting a low-inflation, stable-currency policy.

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This brought about a distinct shift in attitudes among the Socialists towards Europe — a mood that Delors summed up in October 1983: “Our only choice is between a united Europe and decline.” As Rawi E. Abdelal, professor of business administration at Harvard Business School, noted: ‘To the extent that the French Left continued to hope for socialist transformation, its members could see Europe as the only arena in which socialist goals could be achieved.” The problem was that, by 1983, they had little to offer in terms of a Europe-wide progressive alternative, since they had accepted the notion that social-political objectives should be subjugated to “price stability”.

And so, two years later, France strongly supported Delors’s nomination to the post of President of the European Commission — a position he would go on to hold for a decade, serving for three terms, longer than any other holder of the office. It is no exaggeration to say the Delors presidency was groundbreaking, giving the European integration process a momentum that had been lacking in the preceding decade. It is also the period in which the foundations of monetary union, and more generally of neoliberal Europe, were laid down — a development in which Delors, and the French Socialists in general, played a key role.

Their logic was the following: given that, within the EMS, the Bundesbank effectively set the interest rates for all participating states, and that leaving the EMS wasn’t considered an option, the French became increasingly convinced that there was only one way to preserve a low-inflation fixed exchange rate system while also wrestling control of monetary policy away from Germany: to push for a full European monetary union. For Delors, creating a single European currency became an utmost priority, and he set out to persuade his reluctant fellow European policymakers to embrace the idea. The first step was the signing of the Single European Act, in 1986, which set the objective of establishing a single market by 1992. Delors also proceeded to export France’s new views on capital movements to the rest of Europe, by pushing for the full liberalisation of capital flows across the continent — paving the way for a monetary union.

This brings the historical importance of the French Left’s neoliberal turn into stark relief: if the French hadn’t embraced financial liberalisation at the domestic level, they never would have offered their support for an integrated European financial market — and a monetary union would likely never have seen the light of day.

The Commission’s proposals were initially met with fierce resistance from a number of governments. But by the late Eighties, Delors had succeeded in radically changing Europe’s approach to capital controls — and in getting EU member countries to introduce full capital mobility by 1992, effectively making the free movement of capital a central tenet of the emerging European single market. This was a binding obligation not only among EU members but also between members and third countries.

In effect, Delors had succeeded in pushing Europe to fully embrace the “Paris consensus”, the European equivalent of the Washington consensus. The consequence of this was a European financial system that was, in principle, the most liberal the world had ever known. In this sense, the Europeans, far from being passive recipients of the free-market policies being concocted in Washington, actually preceded the Americans in embracing neoliberal globalisation, and promoting the spread of global capital.

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This also profoundly influenced the construction of the monetary union. In short, Delors succeeded in convincing European governments that, by joining the EMS and liberalising capital flows, they had effectively already lost much of their economic sovereignty; they therefore had little choice but to embrace monetary integration as a way to regain some sovereignty at the supranational level, by “having a say” in Europe’s collective monetary policy. It was a shrewd argument, but a fallacious one: as history would show, by ceding their monetary policy to a supranational central bank, European governments simply ended up losing what little sovereignty they had left.

However, Delors was aided by the fact that, by the early Nineties, even the German establishment had come round to the idea of a monetary union — and indeed, national elites in most European countries had come round to the notion of a supranational central bank, fully immune to democratic pressures, as a useful way to insulate economic policy from popular contestation. By 1989, the Delors Committee had published its hugely influential Delors Report, which essentially acted as a blueprint for the construction of monetary union in the coming years.

The final act of this democratic tragedy came three years later with the Maastricht Treaty. This didn’t only establish a timeline for the establishment of monetary union (in line with the Delors Report), but also created a de facto economic constitution that embedded neoliberalism into the very fabric of the European Union. By the time the Delors Commission came to an end, in 1995, much of the groundwork for the techno-authoritarian and anti-democratic juggernaut that the EU would later become was laid — and, to a large degree, we have Delors, a French Socialist, to thank for that.

Ironically, this didn’t just lead to the demolishing of the Left’s cherished European social model, to the benefit of financial-corporate interests (and, of course, Germany), but it also paved the way to the demise of the European socialist Left — and to the rise of the populist Right. More than anyone else, it is the latter who, today, should pay tribute to Delors.

He had, however, made a minor adjustment to pension rules which meant that Madeleine, our next-door neighbour in Normandy, Clare’s surrogate grandmother, had been obliged to return to work. In Madeleine’s frequent absences a semi-wild cat that she and Clare had befriended had vanished, presumed dead. So, Madeleine concluded, Monsieur Raffarin was to blame for the death of their cat.

The constitution and conventions of the French Fifth Republic provide for a double-headed, or chauffeur-driven, government. The president is in power but not at the wheel; the prime minister runs the country day-to-day. The president controls foreign and defence policy and sets the course for the nation. In Charles de Gaulle’s conception of things, it was the prime minister’s job to deal with “events, dear boy,” and become unpopular. The president should remain aloof, monarchical and — in theory — adored by his people. Jean-Pierre Raffarin, in becoming the object of blame for the death of a semi-wild cat, was doing more or less what Le Général had intended. 

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That was 18 years ago. If the same incident occurred today, there is no doubt who would be to blame — not Prime Minister Edouard Philippe, but President Emmanuel Macron. Something has gone awry with De Gaulle’s grand plan, now 61 years old, for governing a country that he thought was ungovernable.

The age of Facebook and Twitter, the decay of the traditional media, and the decline of deference, has made the notion of wholesale power without detailed responsibility unsustainable. The French people now take the view that they elect a president to run the country — not just to represent and guide the nation. If things go wrong, even if they do not go very wrong, it is the president in the Elysée Palace that they blame; they tend to be forgiving, or indifferent, towards the man (there has only once been a woman) in the Palais Matignon, the home and office of the prime minister.

President François Mitterrand (in power 1981-1995) was probably the last French head of state to make De Gaulle’s concept work, though some argue that it never did work very well. Jacques Chirac (1995-2012), Raffarin’s boss, took a detached view of daily politics, but still became unpopular — until he died last year at which point France discovered that it had always loved him deeply. Nicolas Sarkozy (2007-12) tried, in effect, to be his own prime minister. Ditto François Hollande (2012-16). Both were one-term presidents.

Emmanuel Macron (2016- ), by declaring himself “Jupiter,” tried to revive something of the Gaullist presidential mystique — and immunity from 24-hour news. He has failed.

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Consider two recent opinion polls, researched during France’s coronavirus lockdown, which ended on Tuesday. (Disparities between polls are common in France.) Ifop-Fiducial for Paris Match found on 2 June that President Emmanuel Macron’s approval rating was 40% (no change). Prime Minister Edouard Philippe’s was 53% (up 7 points). Odoxa for France Inter found, on 26 May, that Macron’s rating was 35% (down 7 points), while Philippe’s was 46% (no change).

There have been opinion polls showing prime ministers to be more popular than presidents in the past — but an 11 to 13 point gap is exceptional. Macron has received the blame for what has gone wrong in France’s response to the Covid crisis, even though France has got many things right. Philippe, who has been in day-to-day control and was personally responsible for at least one bad decision, has prospered in popular opinion. He is seen as a likeable man and a safe pair of hands.

Philippe’s new-found popularity comes at an awkward time for Macron. The President knows that the economic after-shock of the Covid crisis will undermine his hopes of re-election in two years’ time. He is tempted to do what Fifth Republic heads of state have often done — to relaunch his presidency by changing his prime minister. But how can Macron dump Philippe when the Prime Minister is the most popular member of the government team? If he does so, might Philippe — a transfer from the centre-Right who never joined Macron’s start-up centrist party — run against the President himself in 2022 and win?

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The conundrum has been greeted with mischievous joy in recent days by opposition politicians from far Right to hard Left. They have taken to  Philippe’s parliamentary speeches and televised press conferences as a way of teasing and embarrassing Macron.

A leading ally of Macron told me: “No decisions have yet been made yet but there will definitely be a Government reshuffle in early July.”

“Macron wants the remaining two years or so of his mandate to take a new direction….something less confrontational, more ecological, probably a little to the Left, something which takes account of the shocks of the Covid crisis.”

Whether Philippe is dumped or carries on is 50:50 at the moment, the Macron ally says. The Prime Minister is a fiscally conservative man of the centre-Right. He may not feel comfortable with the probable new direction of Macron II.

“In any case, Philippe is exhausted,” he said.

“There is no animosity between the two men, despite what you read. Philippe could agree with Macron to quit while he’s ahead. He would then have a good chance of becoming President himself one day….But whatever happens he won’t run against Macron in two years’ time. He’s much too loyal and honourable a man to do that.”

The decision is further complicated by the shortage of compelling candidates to replace Edouard Philippe. Logically, if Macron wants to steer to the Left or to turn green, he needs a prime minister with a leftish lean or a greenish tinge. But who?

The only half-way plausible name to emerge so far is Jean-Yves Le Drian, the foreign minister and former defence minister. Le Drian is a former history teacher and former mayor of Lorient in Brittany. He is Catholic and socialist, from a working-class background — a combination now rare on the French Left. He is competent but dry, a manager rather than an ideologue. He has no known green tendencies.

Le Drian is 72 years old. His promotion would install a rather odd couple at the head of the French government – a 42-year-old president-monarch and a 72-year-old prime-minister-chief-vizier. 

Macron’s youth and political inexperience partly explain why he has never been able to imprint himself on the French collective mind as father of the nation. He has delivered on some of his promises and made several important economic reforms, but there is something in his character that annoys many French people. He has no traditional, grassroots power base and has failed to create one; and his reforms have angered the Left.

His main claims to deserve a second term — a sharp fall in unemployment; a boom in foreign and domestic investment — will be buried by the economic crisis which follows the health crisis (an anticipated 11% fall in France’s GDP this year). Hence the need for Macron, as he said in a televised speech to the nation on 13 April, to “re-invent” himself.

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Macron’s relationship with Philippe has been placed under huge strain by three crises in the last 20 months (more than any other Fifth Republic President has faced). During the original Gilets Jaunes rebellion, of November 2018, Macron was the principal target of provincial working- and middle-class abuse. He felt himself to be isolated and exposed — but nonetheless chose to leave his Jupiterian Mount Olympus to make a successful tour of local town hall meetings. Philippe was little seen.

During the pensions reform crisis of October last year, Philippe was thrust onto the front line. Macron, although the reform was largely his idea, opted to hide. He disliked some of the tactical choices made by Philippe but had to go along with them. Relations between the two began to fray.

During the Covid crisis, Macron has appeared in various guises, or disguises — sometimes standing back, sometimes thrusting himself into the limelight. He made four TV addresses to the nation in the space of a month, from mid-March to mid-April, in which he variously “declared war” and then admitted mistakes and announced that the world would never be the same again.

Meanwhile Philippe made a series of very competent appearances at press conferences and on the TV news, painstakingly explaining the science and the logistics of the Covid crisis. Overall, France has coped better than most similar countries but, unlike Germany, failed to test widely and rapidly. The government initially misled the nation on the reasons for this failure. Philippe and his ministers made more mis-statements than Macron, but Philippe has attracted less of the blame.

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Overall, allies of both men say their relationship has been healthier, and more equal, than between most Fifth Republic presidents and prime ministers. De Gaulle employed three prime ministers in 10 years; George Pompidou had two in five years; Valéry Giscard d’Estaing had two in seven years; Mitterrand seven in 14 years; Chirac 4 in 12 years; Hollande three in five years.

The only president to be “faithful” to a single prime minister was Sarkozy, who patronised and marginalised François Fillon. The two men came to detest one another and took mutual revenge during the centre-Right primaries in 2017 (allowing a young, centrist upstart to become president of the Republic).   

Both Mitterrand (twice) and Chirac (once) were obliged to appoint prime ministers from opposition parties after losing parliamentary elections. These so-called “cohabitations” had the Wizard of Oz effect of revealing that the Fifth Republic constitution actually grants French presidents very few direct powers. Without a majority in the national assembly, they are even more powerless than a US president without a majority in House and Senate.

These three periods when Prime Ministers ruled alone contributed to the de-mystification of the Olympian presidency imagined by De Gaulle. So did Chirac’s selfish decision in 2002 to reduce the presidential term from seven years to five so he could run again, despite his age and failing health. Having presidential and parliamentary terms of the same length linked the presidency to the parliamentary system; it became less of the independent power base that De Gaulle had intended.

In any case, the mediascape and the political zeitgeist has changed utterly since January 1959, when De Gaulle gave up the prime minister’s job to become the first president of the Fifth Republic. It is no longer feasible for a president to be a back-seat driver on all but foreign and defence policy. The role of the prime minister has become unsustainable — a source of instability, of staff intrigue and jealousy, rather than a throwaway shield or detachable front-bumper.

And yet a return to a straightforward parliamentary democracy, with a French chancellor or dominant prime minister, is inconceivable. It would be against French instincts. It would also be against the spirit of the times.

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The French presidential system, for good or ill, suits and reinforces the worldwide twenty-first century decline of political parties. It chimes with the global trend towards charismatic leaders who know how to play on the cynicism and credulity of public opinion.

Macron surfed that mood in his own way in 2017 but he was neither cynical, nor charismatic, nor anti-establishment enough to ride the wave for long. His great fear for the Corona-skewed 2022 election is not a treacherous run by Edouard Philippe, nor even a triumph by Marine Le Pen. He fears the emergence of a bewitching figure from outside the political system. Paradoxically, the double-headed French system of government — giving a would-be charismatic strongman a prime minister to do the dog-work — could make such a candidature more plausible.

That, after all, is more or less how Vladimir Putin translated De Gaulle’s blueprint for government into Russian. 

I want to suggest the opposite: that under the rules that operate within the EU, the very formation of the NHS would not have been possible. For written deep within the DNA of the European Union is a commitment to precisely the sort of neoliberal economics that would have completely undermined the very possibility of a National Health Service.

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The story begins 75 years ago this month, with the gathering of economic experts at the Mount Washington Hotel at Bretton Woods in New Hampshire. Seeking to construct a new economic order amid the ashes of the Second World War, the economists at Bretton Woods, including John Maynard Keynes as a representative of the British government, set up a global financial architecture that laid the groundwork for an unparalleled period of peace and financial stability.

Lasting from 1944 until the early 1970’s, the financial system designed protected the great projects of national reconstruction from international financial speculation. Exchange rates were to be pegged to the value of gold, capital flows in and out of a country were to be limited and managed. During this period, there were no significant financial crashes. And Western governments, responding to their democratic mandates, were able to fulfil the wishes of their electorates unperturbed by the sort of financial speculation that might have undermined them.

In the UK, Clement Attlee came to power a year after Bretton Woods. He was the most successful Labour Prime Minister there has ever been, establishing the welfare state, the NHS and full employment. No Prime Minister did more for the poor and the vulnerable than Clement Attlee. He was dead against joining the EU. Total hero.

Compare and contrast what was possible for Attlee and what proved to be impossible for another socialist leader who came to power in the post-Bretton Woods era. François Mitterrand was elected President of France in 1981. French voters had rejected the austerity policies of the Seventies and Mitterrand set about preparing for a programme of government – increase in public spending, nationalisation of the banks, greater taxation of the wealthy and an increase in social security. The global financial markets reacted with horror and invested capital began rapidly to flee from France. This is precisely what Bretton Woods, with its strict capital controls, had protected the Attlee government against.

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As the French crisis deepened, a heated argument broke out within the French cabinet between those who wanted to tough it out and stand up to the financial markets, and those who accepted that capital flows represented a new financial reality and that it was useless to resist them. It was a pivotal debate. Who was to be boss: democratically elected governments or capital markets? What was more powerful: one person one vote or one dollar one vote?

I owe the insight to the American financial journalist Robert Kuttner and the fascinating challenge of his 2018 book Can Democracy Survive Global Capitalism? For Kuttner, what he calls “the disgrace of the centre left” was its adoption of neoliberal economics as an unquestioned reality.

When asked about her finest achievement, Margaret Thatcher thought about it for a moment and then answered: “Tony Blair.” It’s a telling reply. With Bill Clinton and Tony Blair, the Left pivoted from a desire to manage and control capitalism to a full-on acceptance of neoliberal economics. The markets were king. Clinton and Blair disguised this surrender by reaching out towards identity politics and individual rights as the new marker of Left-wing identity.

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So, why would the foundation of the NHS be impossible under the European Union? Well, the leader of the anti-Mitterrand group in the French cabinet was finance minister, Jacques Delors. It was Delors who derailed Mitterrand’s socialist plan, and it was Delors who was most responsible for the return to precisely the sort of austerity politics that the French electorate had rejected and the capital markets were demanding.

In 1985, Jacques Delors became the President of the European Commission (1985-1995) and he set about arguing for the European Union to adopt strict controls on national debt and the dropping of capital controls. His crowning achievement was the Maastricht Treaty of 1992.

Thank God we did not join the Euro. Because, as the people of Greece discovered to their cost, that was a tipping point in the balance of power between capital markets and democratic governments. But even outside the Euro, the abandonment of Bretton Woods style protections that shielded us against the power of financial speculation, the desire of socialist governments to introduce welfare reform would still be undermined by capital flight. A future Corbyn led government might yet discover this.

And here we come to the heart of the Left-wing case against the European Union. Personally, I believe it was Bretton Woods and not the European Community that was most responsible for post-war peace and prosperity – and the Maastricht Treaty was the final nail in its coffin.

For Maastricht inscribed neoliberal economics into the founding structures of the EU: capital was free to flow as it pleased, unrestricted by the democratic wishes of electorates. National governments were no longer allowed to run up debts, even if their electorates wanted them to. Democracy had to play second fiddle to capital markets. Under these conditions, the Attlee project would have been totally impossible.

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The question of the EU and democracy is not just about its desire to overturn the wishes of the largest mandate this country has ever given to anything. It is a question about whether democracy can survive global capitalism. And if we do not leave on 31 October, the answer will surely be no.

“Basically there are two solutions” wrote the economist and philosopher Karl Polanyi in 1935: “The extension of the democratic principle from politics to economics, or the abolition of the democratic ‘political sphere’ altogether.”