While everyone in France is waiting for tomorrow’s decision (and not “dÃ©mission” i.e. “resignation”, as Villepin said today in a dreadful slipe of the tongue) of the Constitutional Court on the CPE, I urge everyone to go read Wolfang Munchau’s refreshingly contrarian take on the current crisis.
The column is now safely protected by the FT’s subscriber’s firewall but, thanks to the wonders of globalization, freely available on the website of the Business Standard, an Indian financial newspaper:
At first sight, the travails of Mr de Villepin fit a depressing pattern of Europeâ€™s chronic inability to reform. The prime minister is portrayed in the media as an idealistic political leader who tried to do the right thing, but failed. In the same vein, the young protesters on the streets of Paris look as though they stand in the way of Franceâ€™s transition to the 21st century.
This narrative is as widespread as it is false. As far as I know there exists no reputable academic foundation for Mr de Villepinâ€™s specific proposal â€“ a work contract that removes employment protection for the young, while leaving it fully in place for the old.
Read the whole thing, as they say. It’s a lot better than the lazy drivel the international press has been offering on the subject of late.
For the sake of fairness and balance, I should add that not everyone is buying Munchau’s analysis. For a skeptical view, see our own Edward Hugh.
JerÃ´me of European Tribune, though much more convinced, takes issue with Munchau’s criticism of the 35 hours workweek and the level of the minimum wage in France. I agree with the first point (the shorter workweek is not the economic heresy that many people think it is) but not with the second: there is some solid empirical evidence that the cost for firms of entry-level workers is indeed too high in France (see for instance this paper – pdf). JerÃ´me points out that the French and the British minimum wage are now roughly at the same level. True enough, but one shouldn’t forget the fact that non-wage labor costs (mandatory contributions for pension plans, unemployment insurance, health insurance, etc.) are still a lot higher in France.