Saturday, 17 November 2012
The Economist 's Special Report on France 2012
The cover is the introduction to a 14 page Special Report on France which I just sat down and read. Typically for The Economist it is both lucid and decisive: this is the situation and this is the action required to put it right. The Report pursues some interesting by-ways but remains focussed on a few core themes: France's deficit and debt, the profligate French state, France's declining competitiveness, the stifling of new enterprise by French bureaucracy. Much of it struck me as familiar and none of it seemed unbalanced. - or Pot calling Kettle: most of the quotations come from French nationals close to the heart of French economic and political life or its analysis. There are no Brits sounding off in this Report.
France's state budget has never been balanced in any year since 1974. As a result, public debt has grown from 22% to 90% of GDP. Public Expenditure stands at 57% of GDP and provides agreeable employment for an army of state employees, some of whom have the job of making sure the wheels of industry do not turn or do not turn too fast or do not turn on Sundays and so on and so forth.
It's not in quite the same predicament as Greece but the approach of French politicians has been basically the same as Greece's: being able to borrow money is God's way of letting you get re-elected. When it comes to taking hard decisions, the Enarks are Eunarks. The worst The Economist can think to say of M. Hollande is that he has neither a sufficient sense of the crisis challenging France or the balls to tackle it.
France does have an industrial base, but it has little by way of new industry and the small and medium sized industrial sector is small and still choked by regulation. Many French companies elect to stop growing when they get to 49 employees. Over that, meeting the demands of state bureaucracies becomes onerous.
I would like to feel at ease with France and in France but - even though I speak and read the language reasonably fluently - I don't. This is partly because the State is everywhere. Recently, for example, I got a flyer for a philatelic exhibition in Amiens 2013. Now to me stamp collecting is one of those things in which the State just does not need to interest itself. All that matters to the State is that stamp dealers pay their taxes and collectors their inheritance taxes. It's pretty much like that in the UK. Stamp exhibitions are organised by private clubs or commercial fair organisers who rent out exhibition space and do the organising, the publicity and so on. There are no Permits to be obtained, no Mayors expecting to open the proceedings, no State bureaucracies to be thanked.
Not so in France. My flyer has only one email address on it - www.amiens.fr - even though the exhibition is notionally organised by the (non-state) French Federation of Philatelic Societies. Why isn't it their email address on the flyer? How come City Hall is the address to write to?
My flyer (rather more expensively produced than the average UK flyer) also carries sponsorship logos from Picardie and Somme - basically, from local government which in France (according to The Economist) has rather more money to spend than its UK equivalent..
So what should really be an event organised on private initiative - by an association of collectors or (as is often the case in Germany) by a small company specialising in organising such things - becomes top-heavy with State bureaucratic involvement.
Now, President Hollande, what I really want to hear from you is a declaration that you will pull back the frontiers of the French state and leave stamp collecting to its own devices.