Irwin Stelzer: Analysis
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So Nicolas Sarkozy’s smashing electoral triumph is not the clear blessing that France’s partners originally thought. True, his victory did usher the lamentable Jacques Chirac off the world stage and keep Ségolène Royal and her Socialists from taking the French economy forward into the 19th century. True, too, President Sarkozy has shown that a French leader can exit smiling after a visit to No 10, and make it sufficiently clear he finds America a rather attractive country to put an end to “freedom fries” in congressional dining rooms and references to “cheese-eating surrender monkeys” by Americans reacting to Chirac’s unalloyed anti-Americanism.
We Anglo-Saxons will cheer the domestic reforms that the new French President will ram through to cut unemployment and enable France to contribute to world growth. He intends to cut taxes (so-called social charges) that have stifled the growth in jobs and raise taxes on consumption, perhaps by increasing value-added taxes a thumping five percentage points to 24.5 per cent. Inheritance and wealth taxes are to be chopped and Sarkozy will undercut the rules prohibiting workers from toiling more than 35 hours each week by exempting earnings from overtime work from taxes and social charges.
Throw in plans to require workers to provide a minimum level of public services during strikes and it is easy to picture Margaret Thatcher smiling at the prospect of a new convert. Sarkozy wants most of these changes in place by August, when students are too eager to get to the beaches to riot in the too-hot streets of Paris.
The Muslims in the slums surrounding Paris and in other cities – the racaille, to use Sarkozy’s scornful term – are unlikely to see any near-term advantages and will be infuriated by Sarkozy’s plan to make it more difficult for foreigners to come to France to join immigrant relatives already there – about 100,000 residency permits are issued to family members of immigrants and only 14,000 to foreigners arriving on work visas. Nor are they likely to applaud his programme of stepped-up deportation and if he adds to that the promised toughening of minimum sentences for repeat offenders, he might find his moves tested in the streets, with cars ablaze. Some think this is a confrontation for which the new President devoutly hopes, giving him the opportunity to display the equivalent of Margaret Thatcher’s show of macho when dealing with the coalminers and the Argentines and mimic Tony Blair’s burnishing of his reformist credentials in his Clause Four moment.
So far, so good. But in my private meeting with Sarkozy, arranged by him before the election to discuss labour and product market reforms, I came away with a distinct impression that this is a man every bit as devoted to shielding France from foreign competition as any traditional protectionist, and one not exactly a believer in free markets. He repeatedly used the word “rupture” to describe what he had in mind – a rupture with the past, a change in attitudes that will elevate work over leisure, a politics that changes things rather than preserves the status quo.
I had the sense, however, that the “rupture” was to be something short of the “revolution” that might be required to make France, home to some world-class large companies, truly competitive in a world in which thrusting entrepreneurs are the biggest job creators and young people can hop across the Channel in pursuit of opportunities.
Sarkozy’s insistence that protection and subsidisation of France’s unpoor farmers must remain untouched, even if that means the failure of the Doha Round, can be dismissed as a necessity of French political life. But his calls for tax harmonisation to force low-tax EU countries to raise rates to French levels, his desire to increase the French State’s stake in Airbus, his intention to create a national energy champion by merging Gaz de France and Suez, his plan to shield important French companies from foreign takeovers add up to dirigisme, not reform.
These are core beliefs, not subject to argument. Any doubts on that score were dispelled when Sarkozy led what appears to be at least a semi-successful move to have the new EU constitution – oops, treaty – stripped of its pro-competition language. “Competition . . . is no longer an objective of the Union . . . the word protection is no longer taboo.” Moreover, Britain’s insistence on retaining its pound imposes “social, environmental, fiscal and monetary dumping on Europe”.
All of which raises an interesting question for Gordon Brown, a free-trader but eager to have reasonably good relations with Sarkozy, the second world leader to congratulate him on his move from No 11 to No 10 (Bush was the first). The new Prime Minister’s desire to live down his (well-deserved) anti-EU reputation may explain why he has claimed credit for the deal by which a new EU foreign minister (“What does it matter what we call him?” said Sarkozy) will supersede Britain in the world’s councils. This toadying to the EU superstatists was once reserved for Tony Blair, while Brown berated his finance minister colleagues and pressed for market-oriented reforms that his French, German and other counterparts found a bridge too far into the 21st century.
Now it is Brown who wants the approbation of Sarkozy and friends. Which has him disingenuously insisting that the new treaty marks no reduction of British sovereignty and therefore there is no need for the referendum that he and his party promised in the event of something like the creation of a permanent European presidency, or of a foreign minister in all but name, or of a legal personality for the EU, permitted to negotiate treaties on Britain’s behalf.
Game, set and match to Sarkozy, who claims that the new constitution “was France’s idea from the start”. This is a charismatic politician on the make, one who has every intention of rallying support for the construction of walls against further globalisation, politicising the European Central Bank and driving tax rates up throughout the EU – setting up a Brown-Sarkozy confrontation that will outlast the recent pleasantries. It is ironic that the Prime Minister’s principal ally in his pro-competition battle with Sarkozy is one Peter Mandelson.
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Firstly Sylzowicz,
Many Brits are living abroad, but this is because we are a nation of open minded travellers, we holiday abroad, we are a curious adventurous people.
Unlike the French who are exactly the opposite , they prefer the narrow world of their own culture, language & food.
I have found them to have closed minds & actually quite ignorant of the world outside France. I am not talking about the sophisticats in Paris but the general people of France who still believe France is the best at everything.
John in London,
French carmakers are in dire trouble, like the wine industry they are having trouble keeping up with the newer boys. It's obvious all around here the French are switching to German cars & if Sarkozy does turn the econmy around that will become a bigger problem as there will be more money for them to buy the luxury reliable cars.
Adam in France.
Please believe me the 35 hour week is alive & well here for many , workers arrive at 9 then 2 hour lunch , leave at 5 !
maggie Millington, brittany, france
That a British Prime Minister could ever go along with the charade being played out over the EU Constitution (aka "Treaty:) simply beggars belief.
Jalyt, London, GBR
So how does Tsarkozy think raising VAT a full 5% will improve the economy ? if ever there was a tax to slow the economy it has to be that one.
Does this auger well for those promised jobs ? I don't think so.
The one VITAL thing which has to be [ god knows how ] done is to give/teach the French people the work ethic.
They have no idea how to arrive on time for an appointment, the hours wasted are criminal, strange when you think this is a country famous for clock making. Mind you the same does not apply to workers knocking off, funny they can do that perfectly on time.
maggie Millington, brittany, france
France's "world class" companies are only kept so by the subsidies and protection afforded them by the government.
France can keep its extensive social provision and minimise alterations to its tax rates by loosening regulations on the labour market, which are the primary cause of its economic woes. Hiring and firing in France is nightmarish, and it's stunting growth and creating unemployment.
John, Ribble Valley, United Kingdom
Simon in London, if European farm subsidies perpetuate African poverty by allowing food to be sold to the Africans at lower prices than African farmers can sell it, it seems to me that the African consumer has a wonderful and good thing going. I would love to have foreign tax payers provide me with food and other necessities at lower prices than charged by providers in this country. I think it would be the foreign tax payers who would not sleep well at night. Where do I sign up for such subsidies from foreign tax payers
Jed, Jacksonville,
"undercut the rules prohibiting workers from toiling more than 35 hours each week "
Mr. Stelzler, please at least TRY to look at the real France before printing silly things like this in a column that will be read all over the world.
The only people in France who really do 35 hours are state employees and factory workers, and if you look to anyone with a bit of responsibility, you will probably find out that their working week is much closer to 50 hours than 35.
In some cases, in my team we have actually pulled 60 to 65 hour weeks consistently for several weeks on end, before dropping back tho the more relaxed 50 hours we are doing now. When is the last time YOU left work at 9:45 pm ?
Adam Cox, Dangu, France
Sir,
Personally I believe the UK economy could learn from the French model. For a start the French aerospace industry may mainly work a 32.5 to 35 hrs week, but it is 82% more efficient than its British counterpart.
While the UK has again become a nation of shop keepers, bankers & burger flippers, France and Germany still has real industry and a social structure that does not flog the staff to death with a 48 hr plus working week which makes people fit for nothing else but working, eating fast food and sleeping.
Jim, Lincolnshire, UK
The drawbacks of the UK economy are many but ultimately, it is an open economy that understands the benefits that an international and free market system allow its residents. The strength of London as a financial centre has solid fundamentals, the house of cards analogy is an erroneous one. The growth of world class companies in France is all the more impressive given the red tape they have to put up with. Sarkozy's attempts to make the labour economy more flexible should be lauded ... any attempt to waste more money in supporting inefficient farming techniques directly via CAP or indirectly by trade embargoes should be greeted by a definite NON. The EU institutions have a lot more wood to chop before encouraging further integration.. lets get the Schengen agreement implemented before proposing a federal constitution. "Agreed" in 1985, I still need a passport to travel within the EU.
myles clarke, london, london
If competition has made Britain such a paradise why so many millions of Britons do leave their country to dwell or retire in Spain, Italy and France. Maybe to find a countryside still cared for, decent trains and not too jammed roads, decent hospitals where you do not have to wait a year to be operated if needed. No country in Europe has a comparable number of citizens living abroad than Britain : there must be a reason which is certainly not their knowledge of foreign languages nor their willingness to get one.
If opposing to Iraq war was anti-americanism the bright success of this criminal war speaks for itself.
SZYLOWICZ, Saché, France
Placing Mr. Sarkozy in a box so early in his governing is premature. We mistakenly view politicians' values as how they will govern and it rarely washes out that way. Our own president's governance lies askew of what his stated values were. What happens is that a leader like sarkozy, in his ideals so far from the existing machina-politik that currently exists in France, will never be able to integrate his values fully into the system without dismantling it first-not likely to happen under one leader, as it costs so much politically to do so. As to the dichotomy that the author suggests he sees in sarkozy, well, Protectionism is the core of all politics, and protection of the french countryside rises above politics into nationalism. I do not support porky price supports for US agriculture, but I would support French protectionism for agricultural if I were french. The french farm is a a nationalistic icon, and support for it is low-hanging fruit for any politician.
chris, Phoenix, AZ, USA
Will a leader ever arise again in this country who is not a traitor to its people? It looks as though no-one who is not inclined to sell the country down the river at every opportunity will ever be allowed to gain high office in the future, in either party of power.
Martin, Welwyn Garden City,
well, if we had majority voting on economics, then we could easily outmanouver the French about their protectionalism, but sadly we British didn't want that.
Stefan, Southampton, UK
Dear Guy Ripley: But the perception was that he was applying the term to everyone in those areas and perception is very powerful. Perhaps he showed a lack of wisdom and sensitivity in not making sure that a distinction was made between those who "were taking advantage of the situation for their own ends" and those who were outraged by the deaths that had occurred?
Steve, Preston, UK
I just cannot understand how Sarkozy can sleep at night with the clear knowledge that farming subsidies perpetuate African poverty. The fact that by surrendering the UK rebate Blair and Brown (yes they were in the same administration despite the impression given by the BBC) providing funding for CAP makes them all partners in crime. Children are dying. We must give Africa a chance to trade with us and we should do this unilaterally and we should do this now.
Simon, London,
Sir
It is important to realise the French peoples attitude to authority when voting on anything. The famous NO vote was carried because of Raffarin the then prime minister. It he had advocated NO the Yes vote would have won. He went immediately after the vote.
Whilst most Brits find it difficult to understand aspects of the French culture and lifestyle it is the same on the other side of the chanel.
If I tried to explain to my neighbours that my 81 year old mother has to lock her rubbish bin to stop others dumping, the government are in a state of celebration because hospital waiting is 18 weeks and that to own a home my son has to borrow five times his salary and have a 35 year mortgage, they would not believe me.
Vive les differances but lets stop picking holes in each other and if GB does not want any further into Europe OK but stop carping on about it.
paul, Belvianes et Cavirac, France
" [revolution] might be required to make France ... truly competitive in a world in which thrusting entrepreneurs are the biggest job creators and young people can hop across the Channel in pursuit of opportunities. "
Excuse me! France is already highly competitive, consider, Renault, Citroen and Peugeot, what does the UK have to compare? And don't forget Airbus which manufactures more than half of the world's commercial jets (seems quite competitive!).
Unless they are glorified city gamblers or doctors wanting to be vastly overpaid by the government there is no reason for the French to "hop" over here. In fact the hopping may well go in the opposite direction as Britain's house-of-cards economy, based on coffee shops and estate agents, finally starts to collapse.
John, London,
" [revolution] might be required to make France ... truly competitive in a world in which thrusting entrepreneurs are the biggest job creators and young people can hop across the Channel in pursuit of opportunities. "
Excuse me! France is already highly competitive, consider, Renault, Citroen and Peugeot, what does the UK have to compare? And don't forget Airbus which manufactures more than half of the world's commercial jets (seems quite competitive!).
Unless they are glorified city gamblers or doctors wanting to be vastly overpaid by the government there is no reason for the French to "hop" over here. In fact the hopping may well go in the opposite direction as Britain's house-of-cards economy, based on coffee shops and estate agents, finally starts to collapse.
John, London,
Mr Sarkozy has reason to be worried.
I, along with any right thinking compatriot (including I hope Mr Brown) would certainly dump on the EU, from a great height.
By the way I am disgusted my Mr Brown's rejection of calls for a referendum. For a man who is supposed to be a great strategist, this is a wasted opportunity to distance himself from the Blair train smash.
cuffleyburgers, lucca,
Nicolas Sarkozy did not describe all Muslims in the suburbs as 'racaille'. He used this term for the rioters who were taking advantage of the situation for their own ends.
Guy Ripley, Libourne, France
France has several world class companies, but little in the next layer down. I can understand their protectionism, but ultimately it will lead to failure. I predict you will write about M. Sarkozy what you write about M. Chirac in just a few short years.
As for Mr Brown, his arms length policy will continue and it's in our interest that it does while our neighbours keep pretending it's 1965.
Ian, London/Dusseldorf/Paris, EU :O)
Mr Stelzer,
That a British Prime Minister could ever go along with the charade being played out over the EU Constitution (aka "Treaty:) simply beggars belief.
There is nothing else to say about the matter.
Eric, Plymouth, Massachusetts, USA