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"THE French constitute the most brilliant and the most dangerous nation in Europe and the best qualified in turn to become an object of admiration, hatred, pity or terror but never indifference." Thus did a young Alexis de Tocqueville describe his motherland in the early 19th century. His words still carry a haunting truth. Over the past few years, as other western democracies have shuffled quietly along, France has by turns stunned, exasperated and bemused.

They can't get over us. That's why they talk about us all the time!
But more seriously, the last line tells it all: others have gone along, i.e. with the relentless march of liberalisation, but France is resisting, or is at least making noises.

This week's massive one-day protest, drawing 1m-3m people on to the streets, was no exception (see article). This particular stand-off, between the centre-right government of Dominique de Villepin and those protesting against his effort to inject a tiny bit of liberalism into France's rigid labour market, may be defused. The Constitutional Council was due to rule on the legality of the new law on March 30th. But the underlying difficulty will remain: the apparent incapacity of the French to adapt to a changing world.

That's the most annoying bit. That pretense that it's a first, tiny bit of liberalism in an otherwise unflexible labor market. I hope we have put this myth to rest, but that does color the whole thing.

Yet the striking feature of the latest protest movement is that this time the rebellious forces are on the side of conservatism. Unlike the rioting youths in the banlieues, the objective of the students and public-sector trade unions is to prevent change, and to keep France the way it is.

Liberalisation (by the right) is radical. Resistance, by the left, is thus "conservative". It's an interesting reversal. It's true to some extent, but we have to remember what is being conserved or toppled - the old social-democratic order built after WWII that created prosperity for the middle classes and stifled the very rich.

The delusion is that preserving France as it is, in some sort of formaldehyde solution, means preserving jobs for life. Students, as well as unqualified suburban youngsters, do not today face a choice between the new, less protected work contract and a lifelong perch in the bureaucracy. They, by and large, face a choice between already unprotected short-term work and no work at all.

So how is the new law helping? Young workers can already be hired under unprotected contracts? What's the need for an even weaker contract?

And the reason for this, which is also the reason for France's intractable mass unemployment of nearly 10%, is simple: those permanent life-time jobs are so protected, and hence so difficult to get rid of, that many employers are not creating them any more.

It would be nice if they wrote "are not creating enough of them", instead of this silly, and false "not creating them"... but I suppose that's part of journalistic license, right?

There is of course that kernel of truth in that there is that insider/outsider gap in the country. But it's hard to see how widening the gap will help.

This delusion is accompanied by an equally pernicious myth: that France has more to fear from globalisation, widely held responsible for imposing the sort of insecurity enshrined in the new job contract, than it does to gain. It is true that the forces of global capitalism are not always benign, but nobody has yet found a better way of creating and spreading prosperity.

Social democracy?

In another startling poll, however, whereas 71% of Americans, 66% of the British and 65% of Germans agreed that the free market was the best system available, the number in France was just 36%. The French seem to be uniquely hostile to the capitalist system that has made them the world's fifth richest country and generated so many first-rate French companies.

Because a rich country and rich companies do not a rich populace make! How hard is that ot understand?

A common feature unites France's underclass rioters and the rebellious students, as well as the election of the far-right Jean-Marie Le Pen into the run-off of the 2002 presidential election. This is the failure of the French political class over the past 20 years to tell it straight: to explain to the electorate what is at stake, why France needs to adapt, and why change need not bring only discomfort. This failure has bred a political culture of reform by stealth, in which change is carried out with one hand and blamed on outside forces--usually globalisation, the European Union or America--while soothing words about protecting the French way are issued on the other. After a while, the credibility gap tears such a system apart. The French voted for Mr Le Pen in part because they were fed up with the stale mainstream political class. The banlieues exploded because unemployed minorities were fed up hearing that they did not belong. The students and trade unions are in revolt because they do not trust the government to protect them.

That part is mostly true. Reform by stealth. A stale political class. And Le Pen as a way to shake that system. All correct.

Part of the blame for this lies squarely with President Jacques Chirac. He has presided for nearly 11 years, during which mass unemployment has never budged below 8%, France's wealth per person has been overtaken by both Britain's and Ireland's, and public debt has jumped from 55% of GDP to 66%. The liberal instincts he once betrayed as a reformist prime minister in the mid-1980s have long since evaporated. His support for the prime minister's new jobs contract has been tepid at best. His chief preoccupation seems to be to avoid shaking the conservative French consensus, and even that unambitious objective has been missed. It is a measure of how wasted his presidency has been that one of his own ministers, Nicolas Sarkozy, and a 2007 presidential hopeful, can today make speeches that deplore "two decades of immobility" and call for a "rupture" with the status quo.

Again, this is mostly correct. Chirac has done little in his 11 years. The only decent things were done by the socialist government during the long 1997-2002 cohabitation.

Two small corrections.

  • GDP per capita is not wealth, it is the first derivative of wealth, i.e. the creation of wealth (with all the provisos relative to the use of that instrument to measure wealth "creation"). So Britan and Ireland are adding more wealth each year to their existing pile, but that says nothing about that pile.

  • going from 55% to 66% in 10 years could be described as "nudging up" if you were charitable (which is of course not the intent). It's an increase, but it's not that worrying, and I'd be curious to see numbers for others.

But the president is not to blame alone. Nobody on the French left dares to challenge the prevailing paleo-socialist wisdom, and Ségolène Royal, the most popular of the would-be presidential candidates, was roundly derided for confessing faint admiration for Britain's Tony Blair.

Because he spends more than is acknowledged on healthcare and education!!! - NOT for his liberal policies.

 On the right, Mr de Villepin at least had the courage to try to counter the logic of job protection, but elsewhere has scarcely demonstrated an embrace of open markets. Perhaps the closest France has to a new-generation leader prepared to try to reconcile French public opinion with globalisation is Mr Sarkozy. This week he declared that France could no longer "maintain the illusory barrage of a so-called model that each day shows itself to no longer work, nor protect anything or anybody". But even Mr Sarkozy has proved a hard-core national protectionist when it comes to special pleading by French industry. All the while, he and Mr de Villepin's obsessive rivalry over the succession continues to sap France's ability to get policy right.

This fascination by everybody for Sarkozy is really strange, a bit like that for Blair. He seems to be talking straighter thna the others, but he really is shallower than most (like Blair) and likely dangerous. He has a nasty authoritarian streak, as told lovingly by Le Canard Encahiné on a regular basis. At least the Economist has seen enough to tell that economically speaking, he is just as keen as others in France to keep some form of centralised control over the economy.


The choice belongs to France. A bold effort at renewal that could unleash the best in the French? Or a stubborn defence of the existing order that will keep France a middling world power in economic decline? The latter would inspire neither admiration, nor terror, nor hatred, nor indifference, just pity.

You wish, dear Economist. We'll see which country resists better to the Big Bubble Bursting of the naughties.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 31st, 2006 at 12:41:10 PM EST
[ Parent ]
It is true that the forces of global capitalism are not always benign, but nobody has yet found a better way of creating and spreading prosperity.
How long has global capitalism been around, and what has the effect of the Washington consensus been on the developing world?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 12:46:39 PM EST
[ Parent ]
Zarkozy is really dangerous: he's an Aznarite. He was a keynote speaker at the recent PP convention.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 12:50:30 PM EST
[ Parent ]
I am simultaneously reading this and assorted documents on labour protection law.

It's all bollocks. Where are the jobs for life? What are they talking about? Taking Ireland as an example? Ireland has almost the same protections as France on dismissal and on redundancies, according to the bloody OECD:

Conditions under which individual dismissal are fair:


Fair: Dismissal for real and serious cause: for personal characteristics such as non-performance or lack
of competence, or for economic reasons. In case of dismissal for economic reason, the employer must
take account of certain criteria (such as social characteristics, family responsibilities, professional
qualification). During one year after dismissal the employee is given a priority when rehiring.


Ireland Fair: Dismissals for lack of ability, competence or qualifications, or redundancy.  

But France scores a 2 for horror and Ireland scores a 0 for being good. I can't tell the difference. And it appears the Irish definitions ignore all case law, because they list only "Dismissals reflecting discrimination on grounds of race, religion, age, gender, etc., including
when these factors bias selection during redundancies. Exercise or proposed exercise of rights under
Carer's Leave or minimum wage legislation. "

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 12:52:41 PM EST
[ Parent ]
The scoring difference is because in France you're required to attempt retraining or reassignment while in Ireland you're not. That's the difference. Of course, if you fire someone in Ireland for lack of competence  without offering them training they can sue your ass, but you're not required to by law.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 12:58:10 PM EST
[ Parent ]
The retraining/reassignment obligations only concern "economic" lay-offs, not firings for personal reasons like incompetence etc.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 31st, 2006 at 02:26:46 PM EST
[ Parent ]
WOuldn't that defeat the purpose of economic layoffs? Supposedly those happen because you can't support the employee in the first place.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 02:33:50 PM EST
[ Parent ]
I think that if you're restructuring, for instance, you can't just fire Jacques and hire Marie for a different job: you have to offer retraining or transfer to Jacques first. If you're just downsizing you're fine, I think.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 02:36:09 PM EST
[ Parent ]
But you're the employment lawyer.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 02:36:32 PM EST
[ Parent ]
This is such a mess.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 02:37:29 PM EST
[ Parent ]
But you're the employment lawyer.
I shall lay my vengeance upon thee now.

According to the General Regime of Social Security, workers (and their employers) are exempt from Social Security contributions if the worker is older than 65 and has paid contributions for at least 35 years.

And here's the meat that I was alluding to in a different diary:

Article 165. Incompatibilities.

1. The enjoyment of a retirement pension in its contributive mode, shall be incompatible with the pensioner's work, with the exceptions and in the terms  determined by law or regulation.

Added by the law 35/2002, of 12 July. That notwithstanding, people coming into retirement whall be able to make compatible the reception of a pension with a part-time job in the terms established by regulations. During this situation, the received pention will be reduced in inverse proportion to the reduction applicable to the working time of the pensioner in relation to that of a comparable full-time worker.

2. The discharge of a job placement in the public sector delimited by paragraph 2 of section 1 of article 1 of Law 53/1984, of 26 December, on Incompatibilities of the Personnel in the Service of the Public Administration, is incompatible with the reception of a retirement pension, in its contributive mode.

The reception of the mentioned pension shall be suspended for the time during which the said job is discharged, without increases [in the pension's value] being affected.

3. Reception of a retirement pension, in its contributive mode, shall also be incompatible with the discharging of [duties as one of the] Administration Officials referred to in article 1 of Law 25/1983, of 26 december, of Incompatibilities of Administration Officials (This law was repealed and replaced by Law 12/1995, of 11 May, of Incompatibilidades of Members of the Government and Administration Officials.)

Yikes, that was a convoluted mess to make sense of [let alone translate]. Any questions?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 03:10:44 PM EST
[ Parent ]
No, downsizing is the same.

These requirements were brought in to soften the blow of mass lay-offs (which may just as well be decided on for cynical reasons as for authentic ones to do with loss of markets, downturns, etc). They are more stringent for big companies and big lay-offs (so-called "social plans" have to be implemented). Requirements are lower for small businesses and small numbers laid off.

Still, employers tend to want to avoid economic firings because of the extra cost involved. Jérôme said something about this in another thread, don't remember which there have been so many on this employment stuff (remember when it was the CAP they were banging on about and how France could not continue to refuse to see the light and yada yada, at least it was a different subject, sigh...), to the effect that "personal" dismissals were becoming more frequent than "economic" ones for this reason. Employers seek a deal with the employees they want or have to get rid of, give-and-take.

There were no doubt some good intentions behind the "economic" requirements, but they turned out to have some perverse effects.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 31st, 2006 at 03:14:08 PM EST
[ Parent ]
of Jerome cracking his knuckles before setting off... Or tying this red band around his forehead. A lone man, with a mission.

Sorry, I got myself a cold and the mucus is clogging up my brainpaths. I'll attempt a more serious reply a next time.

by Nomad on Sat Apr 1st, 2006 at 05:51:12 AM EST
[ Parent ]


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