Somebody wants statistics but refuse to accept the figures.
Here's more statistics...an excellent article on the French
economy:
AS AN American in Paris during the French presidential election
last weekend, it was hard to understand what the big deal
was.
'Huge turnout as voters set stark left-right duel' read a
front-page headline in the International Herald Tribune following
Sunday's first-round vote in which centre-right candidate Nicolas
Sarkozy and socialist Segolene Royal emerged victorious.
Another read: 'Voters endorse two visions of the future.'
Excusez-moi, but isn't that always the case? The world is divided
into left and right, with shades of grey in between and bursts of
colour on the outer fringes. French voters' choice - between a
conservative (seasonally adjusted for France, of course) former
finance and interior minister and a female lawmaker, both of whom
want to resuscitate France's economy - is really not different from
the one faced by Britons in the late 1970s and Americans in
1980.
The impact isn't likely to be as dramatic in France's case.
'Sarkozy is not like Reagan or Thatcher,' said Mr Christophe
Maillard, secretary-general of Liberte Cherie (Beloved Freedom), a
classical liberal think-tank and grassroots organisation outside
Paris. 'He's still in favour of big government. He's better than
Chirac or Royal. That doesn't mean he's good.'
Mr Sarkozy, or anyone else for that matter, won't be able to
implement his programme without first reforming France's powerful
labour unions, said Mr Maillard. The unions represent only 8 per
cent of French workers but have an influence that is
disproportionate to their size.
It was one year ago that French students and unions took to the
streets, blocking access to many universities.
The source of their angst? A new law that would have allowed
companies to fire workers younger than 26 without cause, or
severance within two years of hiring. The idea that the law would
have improved the job prospects of college graduates - if companies
can't fire they won't hire - seems to have lost something in
translation. There's no point in worrying about job
security when there are no jobs.
Both Mr Sarkozy and Ms Royal, who received 31.2 per cent and 25.6
per cent of the first-round vote respectively, want to revitalise
France's economy: Mr Sarkozy, with free-market reforms, including
tax cuts and deregulation of the labour market; Ms Royal, with more
state spending. She would raise the minimum wage, boost pensions
and create more government-sponsored jobs.
We have a pretty good idea how her initiatives will work out. What
we don't know is whether Mr Sarkozy will be able to implement his
because of the unions.
Disproportionate influence
HOW is it that such a small percentage of French workers can
virtually shut down the country? 'Their power comes from the fact
that the French mentality is very statist,' said Ms Veronique de
Rugy, a French citizen who is a senior research fellow at the
Mercatus Centre, a free-market think-tank affiliated with George
Mason University in Arlington, Virginia. 'They are untrained to
think there is a solution outside of government.'
The media tends to be one-sided, censoring itself so the government
doesn't have to. Unless there's a shift in public sentiment, with
people voicing their discontent, the unions will still call the
shots, said Ms de Rugy.
To many outside observers, the France of 2007 resembles the United
Kingdom of the 1970s.
'People want money, but they don't want to work,' said Mr Laurent
Tordgman, a Paris taxi driver who was shuttling me from office to
hotel. 'People don't think to work.'
They don't think to work because there isn't much incentive.
It's no coincidence that tax rates and unemployment are
high while the number of hours the French spend at work is low.
France's unemployment rate is 8.8 per cent, the highest among the
13 countries that share the euro. Some 2.3 million people are
unemployed.
'If Royal wins, it will be the same politics as Mitterrand,' said
Mr Tordgman, referring to Mr Francois Mitterrand, another socialist
and president of France from 1981 to 1995. 'If Royal wins - many,
many taxes, security bad, immigration bad.'
France's public sector eats up 54 per cent of the economy,
the second highest among industrialised countries (behind Sweden).
Tax revenues are 51 per cent of gross domestic product. Real GDP
growth - 2.5 per cent last year - has lagged behind almost all of
France's neighbours for the last three years as its share of world
exports has fallen.
The statistics are sending a clear signal that reform is needed,
but until the French people hear it, change will come slowly.
'There's a deep-rooted resistance to abandoning the French social
model' with its cradle-to-grave protections, said Mr Bernard
Connolly, global strategist at Banque AIG in London.
He said the unions' hold on the government is not unlike the
relationship between the trade unions and the Labour Party in 1970s
Britain. Then British prime minister Margaret Thatcher stood up to
the coal miners in 1984, stockpiling supplies in advance to keep
power flowing in the event of a likely strike. She won concessions
from the unions and proceeded to implement her programme of
privatisation, freeing the economy from the unions' grip.
Mr Sarkozy, currently favoured to win the run-off in the opinion
polls, should use the time between now and May 6 to revisit Lady
Thatcher's memorable response when her economic reforms were
challenged by her own Cabinet at the Conservative Party conference
in 1980.
'Turn if you like,' she said. 'The lady's not for turning.'
BLOOMBERG
April 30, Straits Times
