Tuesday, 18 December 2012

FRANCE: '' Crisis deepens'': France is worried. France is depressed

In the midst of the economic crisis, France's Socialists are denying reality. The minister of industrial renewal is calling for nationalization of some industries, while the president shies away from necessary structural reforms.  

Fifteen MP's and elected socialist have written to Francois Hollande asking him to change his course to meet the ''legitimate aspirations of employees and workers to improve their modest material conditions of life. '' It is urgent to restore the economic and social agenda top priority of government action'', wrote in a letter published Monday, December 17, by ''Le Parisien''.  

French two-thirds (66%) believe that employment should be the priority area for action in the field of public action, against 46% a year ago, according to the barometer BVA-Institut Paul-Delouvier utilities on Monday, who noted a ''dramatic surge '' of this concern. Between 2010 and 2011, the proportion of French judging the priority employment rose from 46% to 58%. National education comes second (48%), followed by health (38%).

In addition, 42% of good opinions, the survey shows ''a widespread discontent of the French in most major areas of intervention'' of the state, relapsing normal levels observed in the Sarkozy presidency'', notes the barometer.

France is worried. France is beset by doubts and France is depressed, says writer Jean d'Ormesson, a member of the Académie Française. The philosopher Pascal Bruckner confirms his diagnosis: "France's biggest party is the party of fear. The French are afraid of the world, afraid of others and, most of all, afraid of their own fear."

This leads them to turn a blind eye to reality. They feel vindicated in their repression of reality by the crowds of tourists in the country, who value France precisely because of the museum-like quality of its savoir vivre.

President Hollande, a cautious tactician by nature who prefers to bypass obstacles rather than to jump over them, initially believed that he could take his time with the introduction of important reforms. One of the reasons he chose Ayrault to head his government was because of Ayrault's complacent approach. Together, Hollande and Ayrault allowed half a year to pass without embarking on any significant reforms.

Even former EADS chief Gallois, an advocate of the rapid restoration of French competitiveness, had to admit that a program like Germany's Agenda 2010 package of reforms would not be accepted in France. Nevertheless, he did not mince words in his report on the state of the French economy, noting that industry's share of economic output has declined from 18 percent in 2000 to 12.5 percent today.

This puts France in 15th place among the 17 countries in the euro zone, and significantly behind Italy. The country's industrial sector has lost 2 million jobs since the Mitterand era. In 2011, France had a trade deficit of €71.2 billion ($93.1 billion), compared with a surplus of €3.5 billion in 2002. At the same time, the national debt has grown to 90 percent of the gross domestic product.

Public sector spending now accounts for almost 57 percent of GDP, more than in Sweden or Germany. For every 1,000 residents, there are 90 public servants. The public sector employs 22 percent of all workers.

La douce France is a sleepy country of bureaucrats and government officials who want their peace and quiet. But the bad news is beginning to pile up for Hollande.

 Last week, the government was confronted with another disastrous report, this time on the situation facing France's young people, who have been especially hard-hit by poverty and unemployment.

Sociologist Olivier Galland, who headed the study, detects a feeling of bitterness and abandonment among 16- to 25-year-olds. "All of the elements are in place that could trigger yet another explosion," like the one in the late fall of 2005, when there was rioting in the outskirts of major French cities.

"The system won't survive if we don't change," says Gérard Dussillol, a French expert on finance who works for a Franco-Belgian think-tank. He believes that "France, as a domino, can shake the entire system of the euro zone."

Even fashion designer Karl Lagerfeld no longer has anything good to say about his adopted country, where he claims to pay €2 million in annual taxes, which he calls "a sort of spa tax to the French state." French politics, with its symbolic tax on the rich, has become "grotesque," says Lagerfeld, while the French have "sterilized themselves intellectually."  

There are many indications that time is running out for Hollande.

Beyond France's ailing economy, there is another disastrous statistic at play. Some 23 percent of the country's 18- to 24-year-olds live in poverty, according to a study by the National Institute for Youth and Community Education (INJEP). These are mainly high school or university dropouts who have little to no access to health care and limited chances of improving their situations.

Youth unemployment in France has been high for some time, but it has now climbed to 26 percent. For decades, regardless of their political affiliation, lawmakers have been promising to create a better situation for young people. But exactly the opposite has happened. Labor laws protect those who already enjoy steady jobs, while the economic crisis and recession have limited the number of new jobs created.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo: French President Francois Hollande. Photo: Wikipédia.