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 groupâ€“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..
“Reform” is one of the worst instances of what Steven Poole calls Unspeak in current usage, at least as bad as “modernise” and those hardy perennials, “democracy” and “terrorist”. Poole conceived of unspeak as the use of language that deliberately contains no information-if you describe what you want to do as “reforming” or “modernising”, you essentially suck out any content from it. Not only do you shut off normative debate-whether it is good-but also positive, whether it is true. And you neatly frame it as inevitable and your opponents doomed and wrong.
A lot of the talk about “reform” in France, especially from English-speaking sources, seems to think that France is rather like Britain in 1981, a zone of vastly lossmaking, incompetent state industries that must be shut down with, no doubt, the smack of firm government for any progress to be made. This is insane. In 1981, indeed, France had inefficient and outdated state (and private) industries. And, strange to tell, it doesn’t have a vast and inefficient coal, steel and textile sector any more. The answer is that France did indeed go through a painful process of change – the whole coal industry was shut down – but unlike the UK, it also put a lot of effort into what might replace those industries.
The results have been, essentially, a two-speed economy; a core of high productivity, highly globalised but also highly labour-protected industries that you really don’t want to compete with (think Alcatel-Lucent, nuclear power, high-speed trains and AXA), and a crappy small business sector that tends to combine poor social protection with worse productivity (think – the local bank branch that is never ever open). So far, so AFOE, really.
Now, it’s pretty unlikely that a modest reduction in hire/fire costs for two years will get many of that margin of “NEETs”, to use the British welfare state’s ugly acronym for young people Not in Education, Employment or Training, into jobs in the high-tech core sector that’s meant to be so overprotected. What would Arianespace, Sanofi-Aventis and the rest do with them? Recruit more apprentices, perhaps, which happens to be what the French government is already paying them big money to do.
So what is going on? My thesis is that the divisions in the French government demand a constant crisis atmosphere. The main centre-right party, the UMP, is an entity reminiscent of Lord Curzon’s description of the Indian Congress – a ramshackle coalition of interests. Lashed together from diverse conservative, political-Catholic, free-market, centrist and Gaullist groupings as a King’s Party for Jacques Chirac after the 2002 elections, it was originally named the Union for a Presidential Majority before its members realised that this wasn’t exactly inspiring stuff, and could become dramatically silly if the president didn’t agree with them. It was hence renamed the Union for a Popular Movement, which isn’t so much a name as a description, and looks truly odd if you remember that “populaire” in French can be read as meaning “working class”, which they ain’t by a long chalk. They don’t share an ideology, and some of them maintain their own organisational structures, and the leaders are competing ruthlessly for the succession to Chirac.
One way to maintain unity is to seek what the Germans call a Feindbild or “enemy image”. Forget yer squabbles, fools, THEY are coming and we must sink or swim! Another, related one, is to convince everyone that an emergency of such moment is in progress that no effort can be diverted. This is roughly what the French Right has been doing for several years – constant crisis propaganda, used as the delivery mechanism for policies it rather likes and which will, crucially, stir up more crisis.
Funny figures are a running gag in the showâ€“before the dodgy youth unemployment ones, finance minister and former France Telecom boss Thierry Breton pulled a similar one with regard to pensions by deciding to start talking about future pensions liabilities (a flow concept) as a stock concept that should be treated as part of the public debt. Curiously he didn’t ask the Ministry of Agriculture to do the same with farm subsidies, Defence with their future budget..nor did he actually introduce such an accounting treatment, as it would have blown the Maastricht and SAGP criteria to planet Zog. Yesterday, Breton was at it again, claiming that the student demos had cost the economy “hundreds of millions of euros” by frightening off foreign students. I rather doubt there are that many foreign students, and certainly when I was a foreign student I positively relished the prospect of a bit of protest, although I grant not everyone shares this taste.
If the French government wants to do something to tackle unemployment, may I propose the following: firstly, make it dramatically quicker to set up a small business. France already prides itself on a huge variety of independent shops, craftsmen and suchâ€“I would think there is a lot more potential here. And secondly, extend some of those employment protections out of the core, or perhaps do more to encourage unionisation in the noncore economy – if there really is a serious adverse selection problem that makes everyone want to be a civil servant, perhaps its other side needs some attention.
(PS: does linking Dan Davies and Jerome in the same post make me Europe’s biggest blogwhore?)