And you thought I was joking…

Ha. You thought this was an exercise in strategic trolling. Think again; the French Navy’s helicopter carrier Jeanne d’Arc pulled into New York on the 28th for a port call, and to deliver a consignment of books for schools in New Orleans. (French ones, naturally.) Meanwhile, Rudy Giuliani’s primary campaign took a misstep when he badly misjudged his core constituency

«Un sondage montre que 67 % des Américains pensent que le pays est sur la mauvaise voie…», annonce Rudolph Giuliani à une centaine de supporteurs réunis dans un petit restaurant de Hampton, dans le New Hampshire. Costume noir rayé, cravate rouge, l’ex-maire de New York en campagne pour la Maison Blanche balaie d’un regard contrarié la foule trop éparse. «Connaissez-vous un autre pays qui soit plus mal en point que ça ?» «La France !» lance un militant arborant un macaron «Rudy for president», aussitôt approuvé par l’assistance. «Pas du tout !» bondit Giuliani. «Nicolas Sarkozy a écrit un livre excellent sur son programme, qu’il met en œuvre en ce moment», rétorque-t-il à son auditoire un peu confondu.

I’m not sure which is funnier – Giuliani trying to push France as an example to his war-crazed freedom fries base (this is the guy who hired Dan Senor and Norman Podhoretz, mark) or the notion that Sarko is still new, revolutionary or exciting.

I spent enough time on this blog trying to dispel the myth of “Sarkozy, France’s Margaret Thatcher” that iit’s wearying to repeat any of it; but essentially all the media beyond France, and much of it within France, got him completely, embarrassingly wrong. Rather than offering a dramatic ideological break, Sarko is much better understood as a Blair or Berlusconi figure; heavily reliant on a dominant media owner (his own media for Berlusconi; Murdoch’s for Blair; Lagardere and the wave of late-Chirac appointments at France Televisions for Sarkozy), wrapping a fundamentally conservative message in the cult of newness and business style. Security, property prices, and TV.

It’s like Chirac with more caffeine. This is unlikely to change much; the long-awaited ruck with the Left over special pension provisions has resulted in the issue being punted to tripartite negotiations with business and the unions, and the flagship economic policy (introducing mortgage tax relief) was derailed by the courts. Although it’s still theoretically on the agenda, nobody is now expecting a property boom any time soon.

What Sarko is probably worrying about is more that his fiscal boost came before the credit crisis; €15bn of tax cuts that fell precisely the wrong side of the cycle.

Economic nonsense about France

Yet again. Here’s what the BBC has to say in its updated-for-the-upcoming-elections online background article about France:

But France’s economy has grown more slowly than any other developed country in the world. In 2006, its 2% growth was the worst in Europe.

Well, sorry to beat a late parrot, but one year does not a trend make: if we look at, say, the 5-years period between 2002 and 2006, the average annual rate of growth of France was a meagre 1.6%*, but that is equal to the euro area average and higher than what the Netherlands (1,4%) and Germany (0,9%) and Italy (0,7%) and Portugal (0,6%) managed over the same period. I’ll spare you the 10-years period (1997-2006) which is even more favorable to France.

But even if we grant the Beeb’s dubious premise that 2006 growth is the ultimate yardstick to measure the strength of an economy (and in that case I have an old “US has grown more slowly than nearly every other developed country in the world” headline from 2001 to sell you), their claim isn’t even true. Or, if it is, we can safely conclude that Italy (1,9% growth in 2006 according to Eurostat) and Portugal (1,3%) are neither European nor developed countries.
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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.
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We don’t have a Plan B.

Because no one has one. Well, no one has a public plan about how to handle one or more rejections of the European consitution in upcoming national referenda. But as the French referendum is approaching and the numbers do not look too good for the “yes” camp, unofficial Plan Bs are suddenly everywhere, if only to scare the naysaying Gauls into becoming responsible citizens. I know it’s common knowledge by now, but let me repeat it once more – a French “non” would be the worst case, and have possibly nuclear consequences for the EU as we know it. So scaring the voters a little seems like a reasonable approach to me.

In this vein, Bettina Thalmeyer of the Munich based Center for Applied Policy Research has put together a list of possibilities for the day after (and has published a paper about it (in German)) – hoping that it will not be May 30 (the translation and slight modifications are mine, table in the extended).

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Book Review: “European Integration 1950-2003: Superstate or New Market Economy?”

Once upon a time, there was a large, intellectually hegemonic, somewhat totalising ideology rooted in a heterodox school of economics. Its advocates proposed to make massive changes to the structure of society and claimed that only such a revolutionary realignment could alleviate the contradictions and failures of the existing order and save the world from stagnation and misery. They claimed that their programme would produce immediate results, and that the only reason it wasn’t immediately implemented was because entrenched interests were manipulating the public against them.

Ultimately, advocates of these principles did gain power in many places and were able to implement elements of their programme. Some came to power through revolutions of various kinds that granted them the near-dictatorial powers they needed to make the changes they believed necessary. Others were able to convince electorates and even elites that theirs was the way of the future. They turned public dissatisfaction to their advantage, especially during economic downturns when people were willing to turn to new solutions and elites feared that the masses would turn against them.

And, they had some arguable successes, but no unambiguous ones. In some places, particularly those where effectively unlimited power had shifted to them, they often maintained highly inequitable regimes which grew harder and harder to justify, faced ever growing public disaffection, and turned to more oppressive and manipulative means to sustain control. This undermined their movement, but despite the best efforts of their enemies was not quite able to kill it off.

In states where more democratic methods had been used, the need to compromise with established interests and to sustain public consent forced them to accept measures often contrary to their initial programme. Their ideological identity tended to shift over time as winning elections grew more important than ideological purity and as the drawbacks of real power became apparent. Actually being held responsible for results forced many members of this tradition to accept their enemies’ interests as at least partially legitimate, and compelled them to less radical legislative programmes.

In some of those nations, these radical parties became increasingly manipulative and difficult to distinguish from their former enemies. But, in a few places, the necessary dilution of their programme brought about an ideological synthesis that appeared successful, and this success in turn showed that the radical programmes they had once advocated were perhaps unnecessary. In the end, ideology had no real hold on them, and the models and methods that seemed to work became the political and economic programme that they were identified with. Their former allies who operated more dictatorial regimes were easily repudiated.

But others were unable to accept that option. They included dissidents who had been burned by the growing authoritarianism of their own failed revolutions, or who were simply unable to accept that their early ideological purity had become superfluous. They were isolated and powerless, only able to function in the states where their former allies had become moderates, leaving them without meaningful public support. They fumed at the world’s unwillingness to go the way they wanted, and increasingly recast the history of the world in terms of their own ideological predispositions. The past became, in their minds, an unending conflict between an ideologically pure vanguard and scheming established interests, a story of their courageous champions betrayed by back-sliding traitors. Ultimately, the world moved on and these radicals virtually disappeared outside of intellectually protected milieux like privately-funded think tanks and universities.

Of course, by the now the astute reader will have recognised that I am talking about the history of neoliberalism.
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Berlusconi’s Road to Damascus?

The Italian unions are threatening to strike against pension reform, while Berlusconi says government plans to reform Italy’s expensive welfare system are “necessary, fair and wise” (Silvio ‘el savio’?). The Unions say: “There is no pensions emergency. The government…is dramatizing the pensions problem. It doesn’t correspond to reality,” while Corriere della Sera finds a new Berlusconi, one who is a ‘reformed’ character who “For the first time…..turned his back on the miraculous optimism and creative economic recipes of the last two years and smiling persuasively,……tried to reassure people, to win more of their trust”. Meantime one Bank of America economist is reported as saying that “the reform is very weak. They should have gone for something much stronger but that’s more to do with internal opposition rather than the union threat”.

So where are we, is the pension reform question simply an excuse to have a battle with the unions, or is there a real problem in Italy? My own feeling is the latter. In a way I find myself agreeing with Pedro Solbes (which is why, pragmatically I would prefer him not to resign over the Eurostat scandal, although ethically I think he probably should). We have focussed too much on the question of the 3% limit on the decifit, and not enough on the level of the debt (Italy’s debt is currently over 100% of GDP). Even with this small reform Italy’s financies still look very precarious. But cutting pensions, as we can see, is not popular. So which is it? Can Europe reform itself and face up to its demographic reality, or are we going to have to go for ‘fiscal trainwreck’ US style? Do our politicians have more in common with the US ones than we like to imagine?