No joie, little vivre..............

Spare a thought for Johnny Frog.

 

France is in deep merde. ‘France faces bloody unrest’ goes the headline in the Sunday Times

 

A big shot in the Socialist Party warns that ‘violent upheaval’ is likely if Hollande doesn’t get his act together. Another lefty has threatened to ’sweep away the ruling elite’. The French have a history of this, in the Revolution of 1789, another in 1830, and 1848, and 1871, then 1958 which saw the collapse of the 4^th Republic.

 

De Gaulle was forced out by  ‘la chienlie’ of the unions and students, not through the ballot box.

 

A majority of the French consider their politicians are corrupt. The education system is collapsing; qualified young people are emigrating in droves, many to London.

 

Polls show the French to be down-in-the-dumps. There are more Eurosceptics in France than even in Britain. Only a tiny minority believes that France is on the right track. The President is the most unpopular ever. Increasingly, France is becoming ‘Club Med’ both economically and politically.

 

So what’s the problem?

 

It’s the economy, stoopid (mostly).

 

Unemployment is heading towards 11%, double that of Germany. The economy is in recession. The share of world exports has halved since France joined the Euro. The debt ratio is hitting 95% of GDP. French banks are seriously exposed to Club Med sovereign debt. There may well be a need for a bail-out. Government spending accounts for 56% of GDP. Unit labour costs have risen by 30% since the introduction of the Euro.

 

It seems to me that France’s problems are systemic.

 

To our eyes, France is horrendously dirigiste (significantly, there is no equivalent word in English). The tentacles of the State stretch everywhere. Economic problems have been concealed by subtle protectionism. State labour regulation discourages employers from taking on new staff, not least because it is almost impossible to sack anyone. ‘Social charges’ add no less than 50% to the wages bill (one reason why statistics show French industrial productivity to be good is because firms have a strong incentive to invest in machines, not people). The working week is 35 hours. Conforming to regulations is the path to madness.

 

The structure of Government has scarcely changed since Napoleon; there is still a complex web of local authorities that stretches down to a micro-level and gives municipal status to tiny communities, with a Mayor, 2 gendarmes and a part-time fire brigade. (Councillors carry an ID card; if they flash this to the cops a speeding fine is out of the question).

 

But there is no sign of reform. It is self-evident that public spending must be slashed. People will have to work longer, and yet Hollande has just reduced the retirement age. Major changes in the labour market are essential. Most of all, Government needs to rid itself of its anti-business culture.

 

Beneath it all lurks the Euro. The French may see their economic salvation in full fiscal and political union, but the expected benefits of monetary union have not materialised, so ‘more of the same’ could well be the triumph of hope over experience.

 

France is repairing the roof when it’s the foundations that  are rotten.

 

Plus ca change…….

 

Footnote: one thing to admire about the French; they fight their corner. No damn nonsense about Roma refugees! We are currently harbouring a Kenyan gangster who has admitted to between 200 and 400 murders – unsurprisingly, he can’t remember the precise number. We can’t deport him. In France, his feet wouldn’t have touched!