French protests : it’s the politics, stupid!

There are some offers you can’t refuse. An invitation to join the permanent roster of Afoe is one of them. Let me first say, then, that I was initially happy and thrilled and grateful to be part of this wonderful blog. All the more so since it means that I’ll be ineligible for the Afoe Awards next year, and thus spared the humiliation of a third crushing defeat in a row. (For those of you who are scratching their head and wondering “who the hell is this guy?”, check this post)

If is say “initially”, it’s because, as the French guy of the team, I now have the daunting task of trying to explain clearly our current social row over the Contrat première embauche (First job contract) to a mainly non-native readership. As it happens, the BBC has already done a quite decent Q&A on the topic. So go read it to get the basics. And then come back here if you want my long and -I hope- not too muddled thoughts on what it all means.

First, I think there is a basic point of agreement among all serious observers: a repeat of Mai 1968 it isn’t. Sure, there are some superficial similarities, having to do with the fact that students, the Sorbonne and general strikes are thrown into the mix, while various heavy objects are being thrown at CRS. That said, and despite some clever new variation on old slogans (like some students opposed to the closure of the universities shouting that “it is forbidden to forbid students to study”), the goal of today’s students couldn’t be more different from the one of their precursors 38 years ago. In 1968, students were revolting against the idea of their own future being a dull career in plastics. Today, the desperately want the career and are afraid that what they’ll get, instead, is a life of short-term job contracts, instability and unemployment.

As seen through the prism of the international press, the hostile reaction of the youth to the reform of French labor laws is counterproductive at best, idiotic at worst. The narrative goes something like this: a bold, if clumsy, government once again tries to instil a much-needed dose of flexibility in the rigid French labor market; as usual, to borrow the title of a column in the WaPo, “French Take to the Streets to Preserve Their Economic Fantasy”. After a protracted showdown, the government will eventually back off, thereby killing any chance of reverting the slow but inevitable French economic decline. Film at 9.

In fact, things are a wee bit more nuanced. For the full-throated assault on the lazy international consensus Jerome from European Tribune (for instance, here or here) is a must-read but let me quote a bit from noted leftist Eric Chaney of Morgan Stanley :

The popular explanation is that the so-called French ‘social model’ is so deeply entrenched in the genes of people living in France (French or immigrants) that no reform is possible, even when it would make people better off. This is wrong and contemptuous, I think. Everywhere in the world, workers want guarantees for their jobs. When labour protection has become excessive and unaffordable, as it is in France, labour market institutions must be reformed. Many European countries have done their homework, from the UK to Sweden and Denmark, in very different fashions: for instance, jobs are more protected in the UK than in Denmark, but unemployment benefits are much higher in the latter, where the motto is ‘protect workers, not jobs’. In continental countries where reforms took place, they were the results of negotiations, not confrontations.

Chaney goes on to point out that the real French problem when it comes to the job market is not an absence of reform. Rather, it stems from the fact that France has developed an entrenched case of insiders/outsiders disease:

In short, the French labour market is a two-tiered market with, on the one hand, highly protected workers (civil servants and holders of permanent contracts, mostly in large companies) and, on the other, highly flexible jobs (internships, short-term contracts, temporary jobs) for new entrants, immigrants and, more generally, unskilled workers. The reason why college and high-school students are demonstrating, sometimes violently, is obvious: they strongly resent this situation as unfair — why would they accept reforms while nobody is questioning the privileges of the insiders?

What’s more, regardless of whether the CPE is good idea, economically speaking, it is fair to say that Villepin’s governing method has done a great deal to heighten the crisis.

The first thing to keep in mind is that the French parliament is inherently weak: when the government really wants a law to be passed, it always gets its way. This is due in no small part to the fact that the French constitution gives the government various procedural tools to discipline rebel MPs. The most famous and effective of them is the so-called 49.3 (named after the third paragraph of the 49th article of the constitution), which confronts MPs with a stark choice: either let the bill be adopted without a vote or vote to overthrow the government.

Theoretically, that could mean that painful reforms would be easier to implement in France than in other countries. And such procedural tools are of course quite handy when you’re trying to pass a budget without a parliamentary majority. Practically, however, it often creates a perverse set of incentives: why bother trying to build support for your bill if you are 99% sure that the law will be adopted no matter what? The problem, of course, is that snubbing the trade unions and the political parties is a sure-fire way to trigger a direct confrontation between the government and the famed French street.

This is exactly what happened with the CPE. A similar contract was introduced last summer for small businesses (less than 20 employees). At the time, Villepin assured the trade unions that this was really an experiment, and that, of course, they will be consulted before any extension of the scheme. And then, out of the blue, last January, Villepin announced his infamous CPE, which was attached via a last-minute amendement to a bill designed to tackle the problems of the French banlieues.

Predictably, the trade unions -even the moderate, reformist CFDT- were outraged. Less predictably many employers were skeptical and other ministers did let it know to the press that they weren’t exactly warm to the idea. Fearing students protests, Villepin then decided to speed up the parliamentary procedure (using the 49.3 in the process), so that the bill could be adopted while the universities were closed for Spring break. Clearly not the best way to convince people that the law could stand on its merits alone.

Another important thing to take into account is the fact that the current right-wing French government has been more or less unpopular since the second-half of 2003. The regional elections of March 2004 were an humiliation for the ruling coalition. The election for the European parliament in June 2004 saw the ruling party garner a meagre 16,6% of the votes. And, as some of you may remember, the May 2005 referendum on the European constitution wasn’t especially a triumph for the powers that be. Which means that Villepin didn’t have that much political capital to spend to begin with (he was the first PM since at least 25 years to have negative approval/disapproval spread when he came into office).

So there you have all the right ingredients for a major political crisis: an unpopular and pigheaded Prime minister, a rubber-stamp Parliament, pissed-off trade unions and French students who feel that the government has just kicked away the social ladder in front of them.

One of the things you hear quite often in certain French circles is the idea that the only way out of our current economic mess is a good purge, Thatcher-style. Sure, they say, Thatcher’s methods were brutal. But didn’t the painful structural reforms of the 1980s pay off quite nicely for Britain in the long run? I mention that thesis because I’m struck by how much, ideological differences aside, Villepin resembles Thatcher: supremely intelligent, immensely self-confident, wearing his patriotism on his sleeve, cocksure, self-righteous, contemptuous of the lack of “balls” of ordinary politicians.

Which means, I suppose, that Villepin’s not for turning. Even if this CPE turns out to be his Poll tax.

56 thoughts on “French protests : it’s the politics, stupid!

  1. Your wrong on there not being a connection between being young and unemployed and having children. There seems to be a high correlation between not having a change to regular work and having a lot of kids when your young. But that is maybe not the solution that you want to use to increase the number of babies.

  2. “not having a change to regular work”
    I don´t understand the phrase. Google thinks it´s a new coinage. If I´m factually wrong here (for the reason I think you are hinting at), then my position vis-á-vis the commenter I was responding to would still make sense.

  3. “There seems to be a high correlation between not having a CHANCE to regular work and having a lot of kids when you’re young.”

    If you’ve a lots of kids, where a lots start at one, then you’re out of luck to get a regular work.

    At leat that’s what I understand.

    DSW

  4. I hope “that is maybe not the solution that you want to use to increase the number of babies” is a statement where the personal pronoun “you” doesn´t denote the singular but the plural. I´d go further and ask why Charly didn´t use “we” instead of “you”.

  5. That previous comment has been my most linguistically misinformed one so far. I guess I´ll have to relearn some of the simpler words of the English language…

  6. Thanks for correcting my spelling mistakes.

    It is not so much so that people who get kids when they are young are umemployable (though it doesn’t help). But the kind of people who get kids when they are young are the type of people who are not exactly destine for succes.