A Proud Nation Ponders How to Halt Its Slow Decline - NYTimes.com - 0 views
-
Today, however, Europe is talking about “the French question”: can the Socialist government of President François Hollande pull France out of its slow decline and prevent it from slipping permanently into Europe’s second tier?
-
At stake is whether a social democratic system that for decades prided itself on being the model for providing a stable and high standard of living for its citizens can survive the combination of globalization, an aging population and the acute fiscal shocks of recent years.
-
France’s friends, Germany in particular, fear that Mr. Hollande may simply lack the political courage to confront his allies and make the necessary decisions.
- ...21 more annotations...
-
Today, at Nanterre, students worried about finding jobs and losing state benefits are demanding that nothing change at all.
-
as the European economy slowly mends, the French temptation will be to hope that modest economic growth will again mask, like a tranquilizer, the underlying problems.
-
The French are justifiably proud of their social model. Health care and pensions are good, many French retire at 60 or younger, five or six weeks of vacation every summer is the norm, and workers with full-time jobs have a 35-hour week and significant protections against layoffs and firings.
-
the question is not whether the French social model is a good one, but whether the French can continue to afford it. Based on current trends, the answer is clearly no, not without significant structural changes — in pensions, in taxes, in social benefits, in work rules and in expectations.
-
the challenge in France seems especially hard, in part because of the nation’s amour-propre and self-image as a European leader and global power, and in part because French life is so comfortable for many and the day of reckoning still seems far enough away, especially to the country’s small but powerful unions.
-
“The young people march now to reject all reforms,” he said. “We see no alternatives. We’re a generation without bearings.”
-
The Socialists have become a conservative party, desperately trying to preserve the victories of the last century.
-
There is nonetheless an underlying understanding that there will be little lasting gain without structural changes to the state-heavy French economy. The warning signs are everywhere: French unemployment and youth unemployment are at record levels; growth is slow compared with Germany, Britain, the United States or Asia; government spending represents nearly 57 percent of gross domestic product, the highest in the euro zone, and is 11 percentage points higher than Germany. The government employs 90 civil servants per 1,000 residents, compared with 50 in Germany.
-
Hourly wage costs are high and social spending represents 32 percent of G.D.P., highest among the industrialized countries; real wage increases outpace productivity growth; national debt is more than 90 percent of G.D.P.
-
In the World Bank’s ranking of “ease of doing business,” France ranks 34th, compared with 7th for Britain and 20th for Germany.
-
Last year, France was ranked 28th out of the 60 most competitive economies in the world, according to the International Institute for Management Development in Lausanne, Switzerland. The United States was first. Even China, at 21, and Japan, at 24, outranked France.
-
About 82 percent of the new jobs created last year were temporary contracts, up from 70 percent only five years ago, not the kind of full-time work that opens the door to the French middle class. That keeps nearly an entire generation living precariously, no matter how hard people study or work.
-
France is the world’s fifth-largest economy, with strong traditions in management, science and innovation.
-
The gap between rich and poor is narrower in France than in most Western countries, although it is growing.
-
When the French work, they work hard; labor productivity, perhaps the single most important indicator of an economy’s potential, is still relatively high, if dropping. But with long holidays and the 35-hour week, the French work fewer hours than most competitors, putting an extra strain on corporations and the economy.
-
Large French companies compete globally; there are more French companies in the Fortune 500 than any other European country. But the bulk of their employees are abroad, and there are few of the midsize companies that are the backbone of Germany.
-
Ninety percent of French companies have 10 or fewer employees and fear expansion because of extra tax burdens and strict labor regulations.
-
In poll after poll, the French insist that they want renovation and modernization, so long as it does not touch them. That is always the political challenge, and Mr. Hollande’s conservative predecessor, Nicolas Sarkozy, is considered to have failed in his promise to make serious structural changes.
-
One of Mr. Sarkozy’s advisers, Alain Minc, who tried to get him interested in Germany’s social market revisions, once admitted that Mr. Sarkozy was simply afraid to confront the unions and the social uproar that real change would provoke.
-
There is a broad consensus that real social and structural renovation can be carried out only by the left. But that can happen only if Mr. Hollande, who has a legislative majority, is willing to confront his own party in the name of the future, as the former German chancellor Gerhard Schröder did a decade ago with a series of legal modifications that now get much of the credit for Germany’s revival.