Monday, 12 April 2004

Old Europe, Looking Older

Last week’s election results shows that France is at a dead end, with huge economic problems and no political solutions being offered. France is dying of socialism because all French politicians — including the ones who claim otherwise — are socialist. The welfare system and the state are heading toward bankruptcy, and all they can promise is still more public and social spending.

The recent French regional elections were a Berezina for Jacques Chirac’s new party, UMP (labeled center Right but in fact center Left), which was routed for having done nearly nothing. The Socialist and Green parties won without any program but to “restore socialism”, and with no credibility the National Front (populist nationalists on the far right) made no progress despite an extremely favorable environment.

Of 22 French regions, only one will be governed by the UMP-UDF coalition. This is a major political debacle: less than two years ago, the UMP alone (which previously ruled 13 regions) enjoyed a landslide victory with 400 out of 577 members in the French National Assembly. This change is as abnormal as the Soviet score of 82 percent that allowed Chirac to be re-elected president in May 2002 against the National Front’s Jean-Marie Le Pen.

Since the election of François Mitterrand in 1981, the French have systematically sanctioned the team in power. The size and acceleration of the sanction are linked to the size and the acceleration of the decline. It shows how lost we French are. Lost and schizophrenic. We cling to our antiquated welfare system built by Communist ministers at the end of WWII, and our “public services”, although these two elements precipitate the country into decline and bankruptcy.

The French now face this economic panorama: a growth rate of 0 percent in 2003 (despite the 4 percent growth in public spending which accounts for more than half of the GNP), a continuous rise in unemployment since July 2001 (even since 1973 if most unemployed people had not been withdrawn from official figures by “social treatment”, pre-retirement, etc.), a decline in investments for the first time since 1997, a diminution of the number of jobs for the first time since 1993, and so on. Bad social news follows bad economic news.

The French also are aware of high “real” inflation — on housing, food, public services — and the decline of their purchasing power. European statistics reveal a decline in the French standard of living that dropped from 3rd to 12th place among EU countries in just ten years. The entrenched French politico-media system claims that European statistics are not reliable. But lies have limits.

Even if they see the problems, most French think the system is eternal. They do not believe they could go into bankruptcy. Bankruptcy is a problem for “stupid” African or South American people. Being the cleverest people on earth, the French elites, must have invented the best system in the world.

The French are not the only pretentious people. But, among the developed countries, France is probably the one where political elites have the tightest control of the media and the political system. All media are in the hands of conglomerates that do business with the state and thus do not criticize the “civil-servant-politician” caste. Intellectuals, specialists and journalists repeat false statements until people think they are true.

The French have been so brainwashed that many not only think they make the best cheese (would a foreigner at least concede us this superiority or is it the desperate sign of my chauvinism?) but in every other field, as well. The French think they have the best retirement system in the world despite the fact that the state does not have any reserve. They also believe they have the “best health care system in the world”, the “best transportation system in the world”, the “best electric system”, etc.

What about 15,000 deaths caused by a heat wave in July 2003, ten times as many as in Spain or in Germany? The answers of “the system” are simple: the Spanish are used to heat, and Germans spend more money to take care of their elderly. What about huge deficits of €15 billion for the public medical system or €12 billion for the national railway company? This must be because the rich do not pay enough taxes. But if you raise taxes, business goes away. Businesses go to China or the US, two unjust countries where the poor and the ill are dying in the streets: we need to stop globalization or set a worldwide tax.

In the meantime, before the French elites and their foreign socialist counterparts, with the help of the United Nations, were able to convince the world to build a communist planet, France is collapsing “alone” with other socialist countries. But France is failing more rapidly since its system is closer to communism than any other.

Property’s rights are annihilated by taxes; market efficiency is destroyed by preposterous laws. All that French elites do is advocate more public and social spending. Thus even with one of the highest tax rates of all developed countries, the system can not be balanced. The last balanced budget was in 1973. The first oil shock has still not been absorbed. The French state has had a deficit for more than 30 years.

France has the largest deficit of all EU members: over 4.1 percent of GNP. French elites, in their typical bad faith, repeat that it is not such a problem since the US deficit is a little higher (5 percent). They just “forget” to remind us that the US is in a completely different situation. First the US is at war on two fronts, in Afghanistan and in Iraq, with tremendous costs. Second the US deficit is also due to efficient tax cuts that are enhancing the US economy with a 4 percent growth rate while France has globally raised its taxes and knocked down its economy to no growth at all.

The general idea in France is why should we reform our system if we have the best in the world, if deficits and debts are no problem and if bankruptcy is impossible? Even the small reforms made by the government of Jean-Pierre Raffarin were labeled unfair and unjustified by civil servants. This explains partly his electoral defeat. But the main reason is probably that French Conservatives simply did not mobilize to support a government that has done so little.

Its “biggest”, but still small, reform was of the pension system. Most of the 7 million civil servants now have to work 40 years, in theory, to retire. Instead of 37.5. The same process was applied to the 15 million workers in the private sector ten years ago. But the pensions of civil servants have not been lowered as they have has for others. The rates are still calculated on their last six months’ salary as opposed to the “average of the best 25 years” formula of the private sector.

Despite their very favorable situation (better salaries, fewer working hours, more lucrative retirement package, etc.) more civil servants voted than two years ago. They voted against the small reforms thus highlighting their hypocrisy. They do not complain when the state puts the burden on people working in the private sector. Deficits are not a problem… when it affects civil servants.

Despite the small reforms made by Raffarin, one must avoid a common mistake made by foreign and French commentators. Chirac, UMP, UDF and the government of Jean-Pierre Raffarin are described as “conservative” or “from the right”. As all the preceding so called “conservative” governments of the last 25 years, this government of civil servants has, in fact, continued to protect the privileges of civil servants, raised taxes, public and social spending, preserved preposterous laws conceived to regulate the economy. It was in reality a socialist government in disguise.

In theory, the French have a choice between left and right coalitions as in any democratic country. In fact, the French can only vote for statist-minded Stalinist civil servants. They have the choice between socialism and socialism. Because there is no freedom-oriented political offering, the country is condemned to the status quo. But as the French decline shows, the status quo is not sustainable in an evolving world.

In most developed countries, a majority of people, including even a few socialists, now understand that socialism does not work. New-Zealander socialists and Italian communists have lowered the number of civil servants. Swedish socialists have privatized or cut costs in public services. Socialists have been forced by financial realities to lower taxes, encourage market solutions and freedom. In France, even the “conservatives” have not done it. It is the “French exception”: French “conservative” politicians are to the left of most socialists of the planet. One may compare France with the former USSR. The right is Stalinist (Chirac distributed the newspaper of the communist party during his studies) while the left is Trotskyite (former socialist Prime minister Lionel Jospin was a Trotskyite until his late forties).

These latest elections show that no reform of the state, not even the smallest, is possible any longer. Even with an alliance with the populist National Front — like the ones in Austria, Italy or Switzerland — UMP and UDF could not have won a majority.

Like all French political life, the “new” French government is a farce: still the same prime minister and senior ministers, with some newcomers who think like old politicians. The French “conservatives” that were already socialist-minded said they understood the message of the voters: “We are going to make more socialism”. With an aging population and an already deteriorated system, this will mean more deficits.

Couldn’t French civil servants and politicians at least give a damn about the European economy? They have already destroyed the French economy. Europe one is the least of their worries. Not only France but the whole of Europe may thus experience a major financial collapse.

The socialist victories in France and in Spain two weeks earlier make old Europe look even older.

By Jean-Christophe Mounicq

This article first appeared on Tech Central Station.