Chris Walker is Ignorant

If you want to lecture the French on “economic reform”, it pays to have some knowledge of French economic history. If you insist on doing so despite knowing nothing, “Big Mouth Strikes Again” is not a good headline. Of course, it could be some downtrodden sub-editor’s revenge.

Anyway, Chris Walker writes in today’s Independent that Nicolas Sarkozy is “committed to privatisation, and many of the Mitterand legacy stakes are to be addressed, such as Renault, Safran, EDF, and Air France”. Renault was nationalised by Charles de Gaulle in 1945, as punishment for allegedly collaborating with the German occupier. This is not a legacy of François Mitterand, at least not one he’d admit to. EDF is also a creation of De Gaulle, or more importantly the technocrats who ran it and the Communist minister Marcel Paul. It is hard to find an argument that cheap power is a net loss for French industry. Air France has been semi-nationalised as long as it has existed.

Walker also repeats the content-free mantra that “a Thatcherite-style purge and return to free markets has not happened in France in the 25 years since” Mitterand – well, something. Mitterand came to power in 1981, 26 years ago, swung around to the franc fort in 1983, 24 years ago, went into cohabitation in 1986 with the Right, who forced him to privatise many of his nationalisations, won the Presidency again in 1988, won back the National Assembly…but on the way, French heavy industry went through a pretty grinding restructuring process, with tens of thousands of jobs lost. The whole coal industry was shut down. The French also invested heavily in the remaining big industries, which is why they can build trains and space rockets and mobile phone networks and we can’t.

Walker demonstrably knows nothing about France. However, he is an expert.

Too Old To Work For Ericsson?

Well if you’re over 35 you may be. That’s the implication of today’s decision to offer redundancy to workers in the 35 – 50 age group:

Ericsson, the telecoms equipment maker, on Monday offered a voluntary redundancy package to up to 1,000 of its Sweden-based employees between the ages of 35 and 50. The unprecedented move is designed to make way for younger workers.

This fits in with the findings of ongoing research by Italian economist Francesco Daveri. See especially working paper 309: “Age, technology and labour costs”, which examines the case of Finland and especially Nokia (available on this page, abstract pasted at the bottom of this post).

Details below the fold:
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Why France MUST Reform – MUST, I Tell You!

Since the withdrawal of the CPE and the resulting collateral damage to Dominique de Villepin, not to mention Nicolas Sarkozy’s unexpected appearance as a unity figure at the height of the crisis, it’s rapidly being promulgated as conventional wisdom that France “is ungovernable”/refuses to “reform”/cannot be “reformed”. There is only one problem with this discourse, very popular in anglophone leader columns and the like, which is that it’s nonsense.

It’s quite often been raised here on AFOE that the French economy isn’t actually in trouble. Growth, although not great, is ticking along, inflation is controlled, unemployment is higher than the UK but lower than Italy or Germany, and the demographics (as Edward Hugh will no doubt point out) look a lot better than many other countries. Certainly, there’s more youth unemployment than one might like, but almost all the figures for this are wildly misleading. The percentage rate of unemployment in the 15-24 years age group looks scary high, but is actually a very small percentage of that group–because most of them are in education or vocational training of some form and hence not part of the labour force. Unemployment as a percentage of the age group is rather lower than the national rate and not much different from that elsewhere in Europe. (Le Monde ran a useful little chart of this in a supplement yesterday that doesn’t seem to be on the web.) Much – indeed most – of the difference in employment growth between France and the UK in recent years has been accounted for by the UK government going on a hiring binge.

So why the crisis atmosphere? More, as ever, below the fold..
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