A response to Tony Barber

 Tony Barber, European comment editor of the Financial Times publishes an in-depth article on a European country  every Saturday. He quotes many references to back up the points he is making and I always find that I have learnt something new when I have finished reading him.

 Last Saturday, his article was on France:Europe Express Weekend: Macron’s troubles go deeper than pension reforms

and was critical of Emmanuel Macron's approach to governing in general and pension reform in particular.  I felt moved to make some comments and they eventually ran to  three pages. I am happy to post them here on my blog:

 "Dear Tony Barber

 

I enjoyed reading your Europe Express Weekend piece, as always, but I don’t think you have been entirely fair to Macron nor put the policies he has been pursuing in their context.

 

First off, I think it’s fair to say that he is the first President for 40 years who is attempting, with method and determination, to  belatedly repair the slow burning damage done to the French economy by Mitterrand’s decision to cut the retirement age from 65 to 60, at a stroke, in 1981 and the introduction of the 35-hour working week by a socialist Prime Minister in 2000. It was already clear in 1981 that demographic trends would put the pension system under pressure within a few years. But once the genie was out of the bottle, it has proved very difficult, as always, to put it back in. In 1995, Chirac made the first attempt to roll back the abnormal pension privileges (les régimes spéciaux i.e retirement on a full and generous pension well before 60) of the workers and employees in the nationalised railway and energy sectors. The unions fought this tooth and nail and brought the country to a standstill for several weeks at the end of 1995. Chirac, who was not a great reformer at heart, capitulated and the reform was withdrawn. He subsequently endured a long period of “cohabitation” with a socialist majority in parliament and Prime Minister Jospin took advantage of the situation to introduce a statutory 35-hour working week - a one-size fits-all reform that was fine for office workers in the lower and middle ranks of the civil service but totally inappropriate to private industry, not to speak of nurses and doctors in public hospitals. The private sector, fed with large dollops of subsidy, adapted over time but many parts of the public sector, particularly public hospitals, have been thoroughly disorganised, which largely explains, in passing, the sorry state of French public hospitals and particularly A & E services today. Chirac served out his first term, was re-elected in a landslide against Jean-Marie le Pen in 2002 and proceeded …..to do practically nothing (except keep France out of the Irak war) during his second term, now reduced to 5 years. Denouncing “immobilisme”, Nicolas Sarkozy was elected in 2007 to get things moving again. He loosened up labour laws to enable private sector companies to work around the 35-hour working week more easily and introduced tax incentives for overtime (i.e anything over 35 hours - “ travailler plus pour gagner plus”) but did not attempt to amend the statutory working week, that the public sector in particular was keen to keep. He also had a go at reforming pensions but took the relatively easy option of  reforming the private sector system, raising the statutory retirement age to 62, amid widespread protests from the same quarters as today, but did not dare tackle the public sector in any serious way and kept very clear of stirring up the unions by trying to reform the “regimes spéciaux”. By this time, both the public sector pension system and the régimes spéciaux were becoming increasingly unbalanced. It is now estimated, (something that has been little mentioned in the current debate) that the pension deficit of the public sector, carefully concealed by some creative accounting, is around €30 billion a year and that of the “régimes speciaux” another €5 billion. After Sarkozy’s stinging defeat by François Hollande in 2012, his 5-year term introduced some tweaks to labour legislation and a very gradual increase in the number of contribution years required to receive a full pension, to the considerable ire of many in his party and the street, that turned out en masse to protest.

 

In the 2017 campaign, Macron appeared to many as a breath of fresh air. Although he started his political career as Hollande’s economic advisor and subsequently Minister of economic affairs, his recipes for change were anything but socialist. He promised to liberalise labour laws, reduce taxes, particularly on businesses, and sketched out a vision for pension reform to the effect that everyone, whether in the public or private sector, would be subject to the same rules and the same contributions would generate the same pension benefits. He also promised to reduce unemployment in general and improve job prospects for young people in particular by promoting apprenticeships and vocational training.

 

It is only too easy at this moment, with pictures of mountains of rubbish in the streets of Paris and the ancient gate of Bordeaux Town Hall going up in flames, to lose sight of the fact that Macron and his government have delivered on many of these pledges. Labour laws were liberalised very early in his first term, punitive taxes on the wealthy were reduced, taxes on business have been cut and investment, from both France and abroad, has been actively courted and landed. Last year the number of new factories outstripped the number of factory closures; new apprenticeships reached a record of over 800 000 and are still rising. France’s previously very generous unemployment benefits have been curtailed to encourage people back into work more quickly. What economists refer to as supply side reforms have never been part of the French “dirigiste” approach in the past and the cultural changes they have brought about in the French economy have passed largely unnoticed. To take just one telling example: for many years, manual work was considered in France as vaguely demeaning, only fit for dimwits and dropouts, not bright enough to complete the broad curriculum that culminates in the “baccalauréat” and a free pass into university. This attitude is still the basic assumption of the left-wing teaching unions who hold inordinate sway in the centralised ministry of education. But at last, skilled manual work is coming to be seen as a reasonable and profitable alternative to general education, as it is in Germany; parents are less reluctant to see their offspring take apprenticeships or vocational courses rather than scrape through their baccalauréat and waste a few years at taxpayers’ expense in university courses that offer doubtful job prospects.

 

As Macron has projected and implemented this very focused vision of the French economy, it has not always been appreciated, to say the least. But he has used the considerable powers of a 5th Republic President to push these reforms forward, with the conviction that they are essential to making the French economy competitive once again and produce more high-value goods and service after so many years of drift and a widespread feeling of complacency and entitlement. And despite the inevitable protests from the unions and political opponents.

 

I think it is only fair to see the current debate on pension reform against this background. Macron was unfortunate in his first, and probably overambitious attempt, which played itself out between the gilets jaunes and the COVID pandemic.  Although it did in principle enjoy the support of the more moderate unions, it had to be abandoned as protests and the COVID emergency took their toll. But Macron made it clear that pension reform would be back on the agenda if he were re-elected in 2022. He was, with a majority of 58%, although he lost his parliamentary majority just a month later. The current reform is less ambitious than the first and has been contested by all the unions. It is simpler, raising the retirement age from 62 to 64, does not change the way in which public sector pensions are calculated (70% of final salary as opposed to 50% of the best 25 years for the private sector) but it does abolish the  régimes spéciaux, albeit only for new entrants and therefore very slowly. My feeling is that this is once again the core of what the unions are protesting about. They are far more powerful in the public sector than elsewhere and many of their members currently retiring on a full pension at the ridiculously early age of 58 to 60 will indeed be required to work two years longer. For employees in the private sector, who, as a result of previous reforms, must work until 64 anyway, if not more, its effect will be marginal.

 

A lot can and has been said about what Is seen as Macron’s high-handed way of pushing the reform through parliament. Personally, I would have preferred to see it put  to a vote and withdrawn if the vote had been lost, with a return to the original plan of 2017-2018. But Macron clearly judged that he had better things to do in the remaining four years of his mandate than spend yet more time and dwindling political capital on a third version of pension reform.  The best thing that can be said about the 49.3 procedure is that it has at least made clear that there is no alternative majority in the Assemblée Nationale.

 

Especially, as you clearly point out, as this version of pension reform will not have a huge impact on overall public spending. But there are two counter arguments here: the first is that it will at least stop the fiscal deficit and public debt from increasing further, and if it obviates the need for a taxpayer subsidy of €35b. a year, this is definitely progress. Unfortunately however, the French still expect the state to continue to massively subsidise businesses and consumers to shield them from economic headwinds. On top of that, the “whatever it takes” of the last three years has given many the sentiment that the pension deficit is indeed peanuts. By comparison, blanket energy subsidies cost the taxpayer €80b. in 2022 and have been extended for the whole of 2023. Meanwhile, the German finance minister is up in arms over an unforeseen €70b. he is being asked to spend in 2023….

But there is a second argument which is more valid over the longer term and which, I suspect, is more important to Macron and explains why he never ceases to explain, in every interview he gives, that France must re-industrialise and produce more high-value goods and services: if the size of the overall GDP pie can be increased, each individual slice will represent less of the whole. Knowing how difficult it is to cut public spending in any country, let alone France with its very generous welfare state, this is surely the logic behind his supply-side reforms referred to earlier.

 

On the relative strength of Macron and Le Pen at the last presidential election, the map you chose shows that Macron not only won in the major cites but also in large swathes of the rural centre of France as well as almost the whole of Brittany. MLP garners her support mainly from the North (area of mine closures and declining  industries, long a bastion of the Communist party) the East (idem in Lorraine, but Alsace has a more Germanic culture and places more store by law and order) and along the Mediterranean coast from Marseille to Nice, where support is primarily driven by, sometimes rabid, anti-immigrant sentiment, a hangover from the Algerian war and the  many pied noirs and their descendants keeping their resentment very much alive. It is no accident that Eric Zemmour, even more extreme than MLP, tried, unsuccessfully, to gain a parliamentary seat in Saint Tropez! How well MLP and her party can weld these disparate strands into an election winning coalition by simply being anti-Macron and highlighting cost of living issues (as she did in 2022) will be one of the factors determining whether she wins the presidency in 2027. Many commentators seem to think that she will, but I beg to differ. I am fairly sure that in a bitterly fought campaign, she will, on the contrary, be shown up for what she is, a Trump style populist with Trump style friends, notably Putin, a large debt to a Russian bank and facing a judicial investigation over possible misappropriation of European Parliament funds, a demagogue, quick to identify scapegoats but with no coherent vision of the future."

France's painful pension reform

 

    Almost five years ago, I wrote a post on this blog entitled “Brexit won’t happen”. I was wrong, it did happen and, after many ups and downs, became effective three years ago on January 31, 2020.

     

    Long enough to have some perspective on its impact on the UK.

      

    There is little doubt that the effect of deliberately putting up trade barriers with the country’s major trading partners has been economically disastrous. Among the many column inches, speeches, research and anecdotal evidence related to Brexit, that I have digested over this time, by far the most complete compendium is a half hour video put together by the Financial Times.  (The Brexit effect: https://www.ft.com/content/58b6f2af-9171-46ed-97bd-4a4a0f7c0500). Its verdict could not be clearer: on every economic and financial criterion, whether its output, exports, investment or productivity, the UK, has done worse than its European neighbours and the country has become poorer. The former Bank of England Governor, the Canadian Mark Carney, said recently that it was not for him to comment on the policy of the current government, but it was clear that whereas the UK economy was worth 90% of the German economy in 2016, it is worth only 70% today.

      

    The point of this post however is not to add one more voice to all those bemoaning the effect of Brexit on the UK, but to try and suggest some pointers, more suited to a blog entitled “Interpreting France”, for the country just across the Channel that is now embroiled in a heated public debate about pension reform.

      

    As most readers of this blog will know, the French pension system is what is called a “pay-as-you-go system” in which those in work and their employers make a compulsory and proportional payment into the pension system which finances the pensions of those in retirement. Such is the deep-seated mistrust of financial markets in French public opinion that pension funds of the kind that are commonplace in comparable countries are inexistent here. The French pension system is entirely state run and based on intergenerational solidarity. It stands to reason therefore that for it to function smoothly and sustainably, the dependency ratio, i.e., the number of those in work compared to the number of pensioners, has to be in long-term equilibrium. But as in many comparable countries, the dependency ratio in France is currently unfavourable, has been for some time and, with increasing life expectancy, can be expected to remain so for the foreseeable future. The statutory retirement age of 62, one of lowest in the EU, is therefore unsustainable. In addition, the effect of previous mini-reforms over the past 20 years has been to surreptitiously erode, mainly for workers and employees in the private sector, through the non-compensation for inflation or by changing the parameters for the calculation of pensions, the percentage of their former earnings that pensioners receive, another trend that is likely to continue.

      

    This is all the more relevant as the state budget is currently subsidising pension payments in a way that is opaque to most and largely taken for granted by those who should know better. The COR, the official pensions observatory, has calculated that the state budget spends €30 billion of taxpayers’ money every year to compensate for the shortfall of pension contributions in the public sector and another €4 or 5 billion a year to subsidise the (very) early retirement of train drivers and conductors of the SNCF, workers in the Paris public transport system (RATP) and employees of the nationalised and previously nationalised energy industries. And this in a country that has not voted, let alone executed, a state budget in balance since 1974 and currently has a debt/GDP ratio of nearly 112%, second only to Italy in the EU.

      

    The overall effect of all this is compounded by the widespread expectation in public opinion that, in return for their compulsory contributions, pensions should be provided primarily, if not exclusively, by the state. Indeed, the state spends 14% of GDP on pensions, one of the highest ratios in the OECD. It is now dawning on an increasing number of future pensioners that, to maintain their standard of living in retirement, they are going to have to work longer and/or contribute a portion of their own savings. This is one of the factors explaining France’s high savings ratio and the number of tax-deductible retirement schemes that are now being sold by banks and insurance companies.

      

    Emmanuel Macron is staking his political legacy on the successful passage into law of the current reform plans which, while maintaining the foundations of the pay-as-you go-system, would increase the retirement age from 62 to 64. EU statistics show that French workers and employees  toil proportionately less during a typical year than their European counterparts, the 35 working week is the norm in the public and many parts of the private sector  and ever since his first election in 2017, Macron has been consistent about the need for the French to work more, become more competitive and create more wealth in order to reduce public debt, spend less of the budget on social transfers and interest payments and have some financial leeway to spend more on public services like health and education. And in many ways, he has kept faith with that pledge, successfully promoting vocational training which now reaches far more young people than it used to, reducing taxes on businesses, giving them incentives to take on trainees and, more controversially, tightening the rules of the very generous, by the standards of comparable countries, unemployment compensation scheme. While these reforms are undoubtedly having, and will continue to have positive economic effects, without a successful pension reform, they will not be seen as complete, neither by the French nor by France’s partners within the EU.

      

    As always however, whenever pension reform is on the agenda, as it has been in some form or another since Macron was first elected to the Presidency in 2017, the Trade Unions have succeeded in focusing the public debate on issues not of intergenerational solidarity, but of social solidarity and the distribution of wealth in society.  Day after day in the mainstream media, workers in all kinds of jobs say how “unfair” if would be for them to work another one of two years before being able to retire because of the particularly trying requirements of their job. While there is no doubt that some jobs are physically demanding, once you start trying to codify how demanding, every corporation will have good reasons for claiming that its own activity is particularly taxing. Many of those demonstrating in the first wave of protest on January 19, were schoolteachers, train drivers in Paris and railway workers. Can any of them find convincing arguments for not working two years more when schoolteachers in most other OECD countries work longer hours and retire later than 64, while train drivers in the public sector are surly no more overworked than those in the private sector and tram drivers in Bordeaux or Lyon have no less taxing jobs than their counterparts in Paris who can often retire ten years earlier?

     

    It is also relevant to recall that the French system of transfer payments, according to official statistics, does more than almost any other country of the EU to reduce primary income inequalities and that the state still takes, in taxes and levies of all kinds, 44% of the country’s wealth that it then redistributes.

      

    The unions of course know full well that their arguments will resonate more strongly with public opinion than issues of sustainability and public debt, especially at a time when inflation is high and many people find it more difficult than before to make ends meets. And in a country which has spent untold amounts on protecting workers, employees and businesses from the ravages of the COVID epidemic, and was still subsiding energy and fuel bills to the tune of €70 to €80 billion in 2022, it is an easy gambit to claim that balancing the pension system would cost peanuts.

      

    Sensitive to the impact of these arguments on public opinion, the government is proposing, as part of the current reform package, a number of compensatory measures, like raising the minimum pension for a full career to € 1200 or allowing those who started working before the age of 20 to retire earlier than 64.

      

    But the unions, that draw most of the strength from the public, nationalised and previously nationalised sectors, are also advancing a more self-serving and largely hidden agenda which, unsurprisingly, is to defend the interests of their members. Strangely, few observers and even fewer journalists are impertinent enough to ask serious question about the justification of a €30 billion yearly subsidy for public sector pensions, let alone the justification for the retirement privileges of railway or Paris transport workers. Strangely too, the government is very coy about denouncing them. During interviews, journalists usually “serve the soup” as the French say, to their chosen interviewees and simply don’t ask such awkward questions. In the last few weeks, I have heard just one question on a mainstream news network about the €30 billion subsidy but the union leader being interviewed quite simply ignored it. The unions have been fighting to maintain the special retirement privileges of public sector workers since the first time a government set out to reform them in 1995 under Jacques Chirac’s presidency. They brought the country to a standstill, the reform plans were withdrawn and no serious attempt was made to revive them until Macron came to power in 2017.

      

    For the moment, the battle for public opinion seems balanced between those who consider the reform fundamentally unfair and those who realise that current arrangements are unsustainable and, in addition, have had enough of what they consider to be union obduracy and their nasty habit of taking the country hostage to their demands.  After the publication of the draft reform that will be debated in parliament, a country-wide series of marches on January 19 were joined by over 1.2 million people, according to official figures, probably underestimated. Further demonstrations are planned for the end of January and February, with some unions threatening to take more radical action to block the country as in 1995, or during the demonstrations against Macron’s initial reform plans in 2019, that were withdrawn during the COVID pandemic.

      

    In his New Year’s message for 2023, Macron made the point over and over again (“par votre travail et votre engagement”) that the French need to work harder if they want their country to remain competitive, attract investment both domestic and foreign and  create well-paying jobs. He knows only too well that a successful pension reform will be one further, probably irreversible, step on the road towards a more economically liberal France.  Casting one eye over the Channel and the other over the Rhine, there is surely no doubt in his mind which example France must follow.

 

 

 

 

 

 

 

 

 

 

The strange story of the disappearing mustard

Even “The Economist” thought it worthy of devoting an article to French mustard recently: (“Why there is a shortage of Dijon mustard in France” - August 9, 2022). Not any mustard of course, but the Dijon variety, that, as the article puts it, “comes with a nose-tingling kick, not the milder and sweeter sauce slathered on hot dogs in Britain or America.”

 

It is the variety that is used for making proper vinaigrette and it has indeed disappeared from all shops and supermarkets that I have visited in the past two months. Ever since my French mother-in-law, who lived in Dijon, showed me how to make real vinaigrette over 50 years ago, starting with a liberal dose of Dijon mustard, it has become a staple for the evening salad or avocado starter and has proved popular with my extended and recomposed family, even attracting the approval of children brought up in America, who were the first to initiate the habit of dipping a piece of baguette into the empty salad bowl to mop up the last drop of “sauce” – a ritual we have all adopted since.  I get through a medium sized jar every six weeks, so it is no small matter that there are gaping holes in the shelves of convenience stores and supermarkets alike, sometimes adorned with a typewritten sheet saying, “this product is no longer available” or more optimistically, but misleadingly, “in view of the shortage of this product, purchases are limited to one jar per basket”. Enquiries to a shelve-stacking student doing a summer job or the manager of a convenience store elicit little more than a Gallic shrug, at best a cryptic comment, “we shan’t get any more until November.”

 

The root cause, or so we read in the press and hear on the radio, is that most mustard seeds used for Dijon mustard are imported from the Canadian province of Saskatchewan, where the harvest failed last year. And to add to the misery, sunflower oil, the other essential ingredient, comes from Ukraine, now unable to export it.  All this is undoubtedly true, although as far as sunflower oil is concerned, after an initial scare in the spring, it has now clearly been sourced from other countries and seems to be regularly restocked. But of mustard there is none.

 

Not having the millennials’ reflex to look on the Internet for everything that is not immediately available in a shop, it took me a little time to turn to Amazon. And there a surprise awaits. The first jar of Dijon mustard that appears on the screen is the French brand “Maille”, a subsidiary of the food giant Unilever. It is supposedly more authentic than the private label competitors’ offerings, even if the latter probably come off the same production lines. However, it is not possible to buy one standard jar but only a minimum purchase of six for a total of over €40! Very strange for a product that is supposed to be in short supply!   A foray onto Carrefour’s website initially showed that their own Dijon mustard was on offer in single jars, but it was only after registering on the website and agreeing to receive emails on every special offer under the sun that the jar of mustard became “unavailable”.

 

The vague suspicion that there is more to the story than simply a lack of mustard seeds and sunflower oil was further stoked by a chance conversation with another customer in a small shop selling only organic produce, who overheard me asking for organic mustard (of which, as I suspected, there was none either). He said that he is a lorry driver and recently delivered a consignment of goods to the warehouse of a major supermarket chain. There, he was surprised to see, in one corner of the building, pallets stacked from floor to ceiling holding hundreds of jars of mustard. When he asked how come there were so many jars in the warehouse but none in the shops, he was told “we cannot comment on that”!

 

Scrolling further down the Amazon pages, I came across a small jar of Dijon mustard sold with a Marks and Spencer label and dispatched from the UK. I ordered two (at €10 each including carriage!)  and was told that delivery would take two weeks. The small package turned up within a week, with the two jars carefully bubble-wrapped and a large Brexit approved customs label on the front.

 

A very small compensation for Marks and Spencer that have been forced to close all their stores in France after Brexit and a big killing for an enterprising British businessman.  As for me, I can now, at a price, continue making my time-honoured vinaigrette every evening and wait patiently for the shops to start restocking the product normally.

Can French politicians learn to compromise ?

 

From all the breathless comments on election night and the radio the next morning, one could be forgiven for thinking that Emmanuel Macron, re-elected by 58% of voters on April 24^th, was about to be forced to resign. “An electoral tsunami”, said one opposition politician, “a crushing defeat”, said another. Political commentators normally more reserved in their judgements, also sounded as if a dam had broken by systematically qualifying what happened in polling stations on Sunday as a “slap in the face”, “a humiliating defeat”, etc. etc. It was all a little reminiscent of May 10^th 1981, when François Mitterrand beat Valéry Giscard d’Estaing to become the first left-wing President of the Fifth Republic – and some alarmist commentators saw Soviet tanks rolling down the Champs Elysées!

 

In reality, all that has happened is that Emmanuel Macron’s party En Marche and its allies (“Ensemble” as it is now calls itself) has simply lost its parliamentary majority. Certainly a shock for a party that won a handsome overall majority in the 2017 parliamentary elections, but the Ensemble alliance remains by far the largest group in the Assemblée Nationale with 245 out of 577 seats. The “Républicains” who pride themselves on being a “republican right-wing party”, as opposed to Marine Le Pen’s Rassemblement Nationale (National Rally), have 61 seats. On the hard left, Jean-Luc Mélenchon’s “La France Insoumise” (LFI or Unbowed France as it usually called in English speaking media) won 83, and in its recently formed alliance with the Socialists, the Greens, and the Communists boasts 131 seats. The real shock to the system came from a highly unexpected and unpredicted 89 seats won by Marine Le Pen’s hard right National Rally. Le Pen herself was re-elected in her constituency in the North of France with 61% of the vote. Ironically, it was the spokesperson of her party who summed up the situation most appropriately when she said in a Monday morning interview that “Parliament looks a lot more like France than it did before”.

 

And indeed, no commentator seems to have made the point that, despite an abstention rate of over 50%, it is perhaps no bad thing that France’s lower house of parliament now reflects a far wider spectrum of opinion than it did before. On the face of it therefore, this is not a very different situation from that which prevails in many comparable European countries where it is rare for any one party or electoral grouping to enjoy an overall majority and compromises are required to implement a programme of government. France’s politics however, by their history and tradition, are far are more confrontational and not at all used to compromise. Reviewing only the history of the Fifth Republic, there have been two periods of “cohabitation”, the first between 1986 and 1988 under President Mitterrand and the second from 1997 to 2002 under President Chirac. A situation akin to that of the U.S when an elected President faces a hostile Congress. During these two periods, the relationship between the President and the majority party in parliament was more of a permanent stand-off than anything else, with, in both cases, the President trying hard to prevent the parliamentary majority from implementing its policies and the majority party trying hard to minimise the power of the President. Since the seven-year presidential term was replaced by a five-year term in 2002, running concurrently with the term of the Assemblée Nationale (but not the upper house (Sénat) which has a different electoral cycle) Presidents Sarkozy, Hollande and Macron, from 2017 until today, have enjoyed an overall majority in the lower house. Emmanuel Macron’s idea in 2017 was that by combining elements of the moderate right and the moderate left into a broad centre party, that he called En Marche, the country would be governed in line with the wishes of the majority of voters and that the extremists would be relegated to the political fringes.  

 

As I wrote in a previous post (The extremes fight back – April 20th 2022) it has not turned out like that at all. The first warning that governing from the centre and for the centre was not going according to plan was the emergence in the autumn of 2018 of the often violent “gilets jaunes” revolts of the left behind, the disaffected and the working poor. It was not clear at the time where the political sympathies of the movement lay. Some thought on the extreme right, some on the extreme left. Any gilet jaune who tested the political waters by trying to channel the movement in one political direction or another was promptly howled down. The election results of June 19th go a long way to answering the question: the gilets jaunes clearly came from both ends of the political spectrum and have now found some representation in parliament. Once again, Le Pen’s National Rally has 89 MPs and the hard left LFI 83. The shock for many commentators is that for once, a very large range of France’s different communities, young and old, comfortably paid executives and lowly workers, public and private sector employees, urban and rural dwellers, can now consider that they have some degree of representation in the Assemblée Nationale.  

 

How all this will play out in the coming weeks and months is very uncertain. In all logic, political battles could now be fought out in parliament rather than in the streets. Now that all sections of society have some level of representation, pension reform, for instance, could be negotiated first and foremost among the political parties rather than with the unions, whose main legitimacy is in the public sector, which has the most generous pension system and is therefore, quite naturally, the most resistant to change. But in a country that prides itself on being “logical”, the logic of compromise is not very much in evidence! The heated debates, not to say mud-slinging, between winners and losers on election night are not encouraging. President Macron, in an attempt to gauge attitudes of the political parties, has just invited them all for consultations and almost all have emerged from the Elysée Palace announcing that they do not intend to enter into any coalition and even less to a government of national unity.  LFI’s programme is indeed so radical that is hard to imagine their MPs compromising on even those measures that would be favourable to their electorate. Readiness to compromise cannot be expected from Le Pen’s National Rally either, even more so as their MPs see themselves as long time victims of the political system and are triumphant at winning 89 seats in the Assemblée Nationale. The radicality of these two parties at the extremes of the political spectrum is also fostered by the two-stage voting system in France, something that is not always appreciated within the country, let alone outside it.  Contrary to the British first past the post (FPTP) system, with which it is often wrongly compared, the first round eliminates all but two or three candidates and only the second elects the candidate with the most votes. Voters whose candidate is eliminated in the first round can only choose therefore between what is on offer in the second and often choose by default, spoil their ballot paper or abstain. The system was designed precisely to channel voters towards the centre ground of politics and away from the extremes. But for the first time, many of those who voted Le Pen or Mélenchon in the presidential election were able to vote for a candidate of their choice in the second round of the parliamentary elections, given the 60 duels between LFI and the National Rally, explaining to some extent the  large number of seats won by both parties: many right wing or even centre right candidates will have voted RN to keep out LFI and vice versa, in the same way that in the presidential election, many left-wing voters voted  Macron to keep out Le Pen.

 

 

But even more moderate parties like the Républicains have been unusually virulent in their opposition to the President and have said that they will stay in opposition. It is possible of course that the feverish statements on election night will give way to calmer and more rational behaviour as the media spotlight dims and the 577 members of the Assembly meet and work together in the corridors and committee rooms of power. Only if all-round intransigeance were to persist, the President could use the powers he has to dissolve the Assemblée Nationale and organise fresh elections, although it is difficult to see how they would return a substantially different result. Unless therefore compromises can be found, France could be heading for the situation prevalent in other Latin countries, like Spain, Italy or Romania, or, harking back to its own history, the “revolving door” governments of the Fourth Republic in which shaky coalitions were made and unmade in quick succession and any meaningful reform proved elusive.

 

It remains a mystery that Macron did not involve himself more directly in the election campaign, defending his governments’ record, countering the outlandish claims of his opponents that he would continue to “tear down” France’s welfare system and urging voters to give him the powers to continue the sensible, middle of the road policies that he has always advocated. But now that he has landed himself in a hole from which he will struggle to extricate himself, his only choice seems to be to initiate and practise the type of compromise common in comparable countries but that with France’s confrontational politics will be no easy task.  To prevent many of the largely beneficial measures of his first term being neutered or reversed, he must now use his considerable political skills to reach out and negotiate balanced compromises, starting with those MPs and parties closest to him before, perhaps, going further. If he were to succeed, he would leave a positive  - and lasting - legacy to his country.

Shifting the blame !

 While a British minister declared the other day that Boris Johnson was in “yellow card territory” over allegations of partying during lockdown, the French satirical weekly “Le Canard Enchaîné” in its latest edition, promptly held up a red card to the French police for their chaotic and heavy-handed crowd management on the night of the Champions League final at the Stade de France in Paris. And that is not the whole story by far. The French authorities in general and Gérald Darmanin, the Minister of the Interior in particular, have since engaged in a momentous exercise of shifting the blame. After the “incidents” at the entrance to the Stade de France, during which many Liverpool fans were prevented from getting into the stadium, delaying the kick-off by over 30 minutes, the message consistently pumped out by the French authorities has been that the Liverpool fans had only themselves to blame by turning up late and trying to get into the stadium without tickets or with counterfeit tickets.  On Monday morning, after a hastily convened meeting of the organisers at Stade de France, ministry officials and senior police officers, the Minister gave a press conference in which, while apologising for the chaos, he went even further in the blame game by claiming that the Liverpool fans were responsible for a “organised fraud on an industrial scale” to the tune of 30 000 to 40 000 fake tickets.

 

For anyone wearily familiar with the French tendency to blame the British or, as they always say, even if, for once, the description was accurate, “les anglais”, for many things, particularly in relation to football, it was interesting to hear the other side of the story on a BBC radio news programme on Sunday morning.  Many Liverpool fans reported that they had been prevented from getting into the stadium because there weren’t enough gates open and that the automatic turnstiles didn’t work; many complained of police “twitchiness”, others of being sprayed with tear gas – an accusation duly substantiated by numerous short video extracts on social and even mainstream media. Others said that they had been surrounded and mugged by local youths, variously described as “thugs” and “gangs”, both before and after the match, when the police had largely disappeared.

 

 

Herein seems to lie one of the keys to the disorders that occurred and of which Liverpool fans, far from being the instigators, were largely the victims. The police “twitchiness” and readiness to spray tear gas on fans waiting at the turnstiles seems to have been caused by the presence of large numbers of local youths who took advantage of the technical hitches and long queues to jostle unsuspecting fans and try and steal tickets and phones; some were captured on video climbing over the high railings to enter the stadium. The same youths also seem to have preyed on fans leaving the ground after the match, carrying out muggings and robberies. It was subsequently reported that 100 people were arrested and taken into police custody. By Monday morning, 20 were still being held. None of them were English. The next day, the news came that six people, all of them French, had been charged with mugging and robbery and would appear in court.

 

 

A contributing factor to the presence of so many local youths wanting to watch the match in the stadium may have been the fact that the Real Madrid star striker, Karim Benzema, was playing that night. Benzema, one of the most talented strikers of his generation, is a bit of an outlier among French professional footballers. He was born in a poor suburb of Lyon of Algerian parents. Talent spotted at an early age, he entered the First Division Olympique Lyonnais training centre before graduating quickly to the first team and helping the club win a number of trophies in France before transferring to Real Madrid in 2005, where he is now the team captain and one of the artisans of its recent string of successes. However, although he played for the French national team early in his career, his attachment to France has often been in question and contributed to his being dropped from the team for a fairly long period. To the disappointment and disbelief of his many fans, he was not selected for the French squad that won the World Cup in 2018.  One of the problems for the national coach is that he has never concealed his emotional allegiance to his Algerian origins and has consistently and conspicuously abstained from singing the French national anthem at the start of international matches. Such attitudes have come in for a lot of criticism, especially from right-wing politicians who have always had an axe to grind about immigration from former French colonies in North Africa, particularly Algeria. Didier Deschamps, the French national coach, stated that he left Benzema out of the squad in 2018 on “purely sporting grounds” but Benzema himself went on record as saying that he believed Deschamps had yielded to the pressure of “racists”. However, given his sporting performances at Real Madrid it was difficult for Deschamps not to recall him, which he has duly done, and he will undoubtedly be in the squad for the next World Cup in Qatar, where France will attempt to retain its world title. Away from the pitch, Benzema has also been embroiled in a couple of court cases, one of which involved the attempted blackmail of a former team-mate that earned him a one-year suspended sentence.

 

In short, the combination of pure talent and a transgressive, anti-establishment streak has made him into somewhat of an idol for second and third generation immigrants of North African origin in France and he enjoys a huge following on social media.

 

There is absolutely no suggestion of course that Benzema even suspected what was going on outside the stadium as he was preparing to lead his team onto the pitch for the most prestigious final in European football. But his presence at such a high-profile match may well have been an additional magnet for his many followers among the disaffected young men living in the area around the Stade de France. Interestingly, no disorders of this magnitude have been reported at previous football or rugby matches or concerts which are regularly staged in this stadium.

 

It has emerged this week that the Ministry of the Interior was warned about possible “public order disturbances” and the “circulation of fake tickets” three days before the match. A strike on one of the metro lines leading to the stadium as well as the technical problems with scanning tickets at the turnstiles probably set up the conditions for the chaotic scenes around the stadium in the run-up to the match. However, admitting to frequent lawlessness in the areas around the stadium, or that the police were  heavy-handed and clumsy in their handling of the crowds or even, however obliquely mentioned, that the integration “of certain populations”  is still a  big problem around Paris and other large cities, would be unthinkable for the French authorities, just two weeks before crucial parliamentary elections in which the radical left-wing alliance headed by Jean-Luc Mélenchon and the far right Rassemblement National of Marine le Pen seem likely win many more seats than they previously held.

 

In the circumstances, it was far more expedient to lay the blame at the door of English football fans who in general do not enjoy a favourable image in French public opinion. We have learned more recently that the French government, in an attempt to mend fences and make up for publicly uttering manifest untruths in the days after the match, has sent three English-speaking police officers to Liverpool to gather evidence of wrongdoing and allow fans to lodge formal complaints before the French courts.  

 

Be that as it may, once the media circus has moved on, vox populi will be happy to conclude that the whole uproar was caused by “English” football fans up to their usual tricks!

 

The extremes fight back !

 Five years ago, Emmanuel Macron, a political novice, won the French Presidency by a large margin over the extreme right-wing Marine Le Pen. This widely applauded political feat consisted in combining the moderate wing of the Socialist party, widely split during the Hollande Presidency, with the moderate wing of the Républican party into a “radical centrist” movement. In the ensuing parliamentary elections, Macron’s infant party “En Marche” won a decisive majority in the “Assemblée Nationale” the lower house of parliament and Macron formed his first government with political talent poached from both the socialists and the “Républicains”. This, Macron claimed, was in essence the centre ground of politics in which sensible politicians could develop sensible policies that infighting among the main political parties had prevented for too long. And that these policies would benefit a large majority of French voters. An idea that sounded a lot like Giscard d’Estaing’s theory that 2/3 of the French want to be governed from the centre and that he theorised in a book called “Démocratie Française” in 1976! The extremes of the left and the right would, the theory goes, be relegated to the fringes and the renewed centre encompass a large majority of voters.

 

Five years later, after the first round of the presidential election in which Macron is standing for a second term, it has become clear that all has not gone according to plan. Even though Macron increased his first-round score from 24% to 28%, Marine le Pen has increased hers by four percentage points too and, above all, Jean-Luc Mélenchon a former socialist, now much further the left, at the head of a party called “La France Insoumise” (that most Anglo-Saxon media translate as “Unbowed France”) has run a close third at 22%. Adding in the 7% of Eric Zemmour an upstart extreme right-wing polemicist and a few marginal figures on the hard right and the hard left, the extremist vote is now well over 50% of those who voted, with an abstention rate of 25%. Although Macron still has a good chance of winning a second term, the race will be tighter than it was in 2017, perhaps a lot tighter, and Marine le Pen has never been closer to becoming France’s next President.

 

The obvious conclusion that can be drawn from this picture is that Emmanuel Macron has not yet convinced a majority of the French that France is better off governed from the centre, or that he is the best person for the job, or both. In a country that is far more sensitive to the distribution of wealth than its creation, and where voters are quick to scapegoat either the “rich” or “immigrants” for their perceived predicament, Macron’s first move in 2017 to emasculate the wealth tax went down badly in many quarters and tarred him with the label of “president of the rich” that he has never been able to shake off. The “gilets jaunes” revolt, that started in the autumn of 2018, was sparked by a rise in fuel prices aimed to reduce carbon emissions but was considered grossly unfair by many people in rural areas who need one or two cars to get around. It morphed into a lasting revolt against the “Parisian elite” of which Macron, a former investment banker, was seen as the ultimate incarnation. During his five-year mandate, a number of cruel murders by Islamic terrorists of a priest, church worshippers and a schoolteacher have highlighted once again the dangers of radical Islam and the issue of security, that didn’t appear to be on Macron’s radar, and has drawn attention once again to the dire situation of some neighbourhoods around large cities in which Islamism is making increasing inroads.

 

As a result of Macron raiding the traditional parties of the right and the left for the talent necessary to help him govern, the parties concerned have seen their substance sucked out of them and have imploded. Valérie Pécresse of the Républicains, who looked initially as if she might be a decent match for Macron (see my previous post, “Let battle commence”) ran a lacklustre campaign and polled under 5% of the votes. Anne Hidalgo, mayor of Paris but carrying the banner of the Socialist Party, polled under 2%. And these are the two parties who, between them, governed France in various capacities from 1981 to 2017. This is more than just an electoral setback; it is the clearest indication yet that voters have abandoned them.  Most commentators put this down to Macron, who has skilfully siphoned off their best talent. There is certainly a degree of truth in this, but it can also be argued that if the two main French parties had proved able to resolve their internal divisions, put French public finances on an even keel, reduce unemployment and generally help create greater prosperity for all, in an era of European integration and globalisation, they would not be in the dire situation they find themselves in now.  It can even be argued that the French economy has never really recovered from Francois Mitterrand’s decision in 1981 to cut the retirement age from 65 to 60 at a stroke as well as the decision by the government of Lionel Jospin, a socialist disciple of Mitterrand and Prime Minister during the presidency of Jacques Chirac twenty years later, to introduce the 35-hour working week with no productivity strings attached but with massive subsidies to enable industry to adapt. Jacques Chirac, in power for 12 years, including five with a socialist Prime Minister, was singularly unable to do anything positive for the French economy. Neither the impulsive Nicholas Sarkozy, in power from 2007 to 2012, nor the hapless François Hollande in power from 2012 to 2017 were able to stop the rot in their respective parties and in the country. Seen against this background, the results on April 10^th are simply the end game of a slow but steady decline that has been going on for years.

 

This decline in support for the traditional parties of government has been accompanied by  the rise of protest figures like Eric Zemmour, who looked for a time as if he would take much of the protest vote from Marine Le Pen, until that is Russia’s invasion of Ukraine exposed his obvious sympathies for Vladimir Putin and his autocratic regime. Ironically, Marine le Pen, while certainly not reneging on her anti- immigrant stance, has been able to pretend that she is less radical than Zemmour and wage a skilful and seemingly mainstream campaign focused on the bread-and-butter issue of cost of living, capitalising on the sharp increase in the prices of fuel and basic food stuffs.  Both she and Mélenchon have promised a series of seemingly painless quick fixes of subsidies and handouts to alleviate the “pain and “anger” of those who consider themselves hard done by.

 

 

And yet there can be little doubt that over the past five years, gilets jaunes and COVID notwithstanding, Macron’s unglamorous but long overdue policies have put the French economy on a firmer footing for the first time in many years. Despite ballooning deficits, largely due to the “whatever it takes” policy during the pandemic, he has cut taxes for industry and consumers, unclogged the labour market, invested successfully in apprenticeships and vocational training schemes, made a start in reducing inbuilt inequalities in the public education system and started to bring down unemployment. France appears attractive once again for business investment and wealth creation both from inside and outside the country. Unfortunately for him, he is given little credit for this by voters, especially young voters who are seemingly put off by his sometimes aloof manner and more attracted to fiery diatribes from the likes of Mélenchon on the hard left or Marine le Pen on the hard right.

 

On the evening of April 24^th, we shall find out  whether a majority of voters is prepared to give Macron another five years to show that the economy can continue its revival and bring greater prosperity to a greater number or whether, on the contrary, they will blame him and others for their hardships, perceived and otherwise, and entrust the future of their country to an untested populist, a mini Ms. Trump, sympathetic to the Euro-sceptic views of Hungary’s Orban and Poland’s Law and Justice Party and  onetime admirer of Vladimir Putin.

 

France’s immediate future as a respected power in Europe and the G7 and leader of a more forceful EU will depend on their verdict.

 

 

Let battle commence !

 With less than three months to go before the first round of voting in Frances’s presidential election, the campaign is at last starting to look interesting. Although this interest does not extend to the left-wing parties, who are still hopelessly split between seven candidates, the right-wing party of the “Republicains” seems at last to have got its act together and its designated candidate, Valérie Pécresse, is starting to look like she may offer a serious challenge to President, and not yet officially candidate, Macron.

 

In almost two hours of a of a wide-ranging interview on the rolling news network, France Info, the other day, Valérie Pécresse was able to outline her programme, putting forward a cogent set of policies that show big differences with the largely populist ones of all her rivals and certain differences with Macron’s, as well as pointing up some weak points in his record.

 

It is predictable of course that a candidate from a right-wing party will criticise the huge run-up in public debt for which Macron’s government is responsible and the attendant danger of a serious financial crisis once interest rate starts to rise. Contrary however to previous candidates from her camp, like Sarkozy in 2007 or Fillon in 2017, Pécresse did not simply say that the solution was to slash civil service jobs in order to cut public spending but spelled out what public services she would boost and where the cuts should be made to pay for them.  More jobs for the police, the judiciary, hospitals and schools, and much less for what she called administrative overlaps - the number of procedures and regulations that duplicate each other at the many levels of the French administration and that require a small army of civil servants to manage. On the strength of what she claims she has already achieved in the Ile de France (the greater Paris metropolitan area) that she has run since 2015, and where she was re-elected last May, she attacked the repetitive administrative hoops that any applicant for a subsidy, planning permission or benefit has to jump through. And there is indeed, as has been attested in any number of official reports, a crying need for a streamlining of the multi-layered French administration that has existed for so long and that the so-called regional reform of 2013 has tended to exacerbate rather than simplify. During his term of office, President Hollande even set up a “simplification commission” whose results have sunk without trace. And it is true that Macron has done little over the past five years to improve the situation. 

 

She also made her view clear that nuclear power would continue to be the main source of France’s electricity for the foreseeable future but that she would also push for more renewable sources in the energy mix, again as she says she has done in the Ile de France, in which, it should be noted, there are no nuclear power plants!

 

It was also interesting to hear her answer one pensioner who phoned in to complain that his pension had not kept up with inflation, that with €288 billion of public debt, France could simply not afford to raise pensions until there had been a root and branch reform of the pension system. Only by raising the retirement age to 65, she claimed, could France relieve the demographic pressure that, in the absence of reform, would incur even more debt or drive pensions down. Pension reform has been France’s most intractable reform for the last 30 years, as every President since Jacque Chirac has found, and it was refreshing to hear a candidate for the presidency refrain from economic populism. It was also a swipe at a serious blemish on Macron’s record, who has failed to reform the pension system in line with his bold promise of 2017. The reform’s collapse amid endless demonstrations and strikes cannot simply be put down to the onset of Covid but also to the fact that it was ill thought out, badly presented and antagonised too many vested interests at once. Pécresse will undoubtedly dwell more on this point as the campaign progresses.

 

In a nod towards to more radically minded voters who have not deserted the party to the extremes of Marine Le Pen or Eric Zemmour, and in an attempt to win them back, she advocated not only temporary prisons to house offenders sentenced to short prison terms but also, in a more conciliatory approach, measures to support school dropouts and make every attempt to get then back on the ladder of education and training. It sounded a lot like Tony Blair’s old mantra “tough on crime and tough on the causes of crime”. And although she cannot reasonably disagree with Macron’s policy of reducing class sizes in primary school, she can legitimately point to the still high number of school dropouts and the despair and lawlessness in some blighted suburbs from which they too often come.

 

Finally, to show that she also has a grasp of foreign policy, she mentioned that she had studied Russian as a student and worked in the French embassy in Moscow as a trainee at ENA. This gives her an insight, she claimed, into what makes the Russians tick – and that they only respect strength in an adversary. A timely reminder as Vladimir Putin throws his weight around in Europe and whom Macron is often accused of trying to appease.

 

It is easier of course to criticize than to act. But what her interview showed was that she was not afraid to face some divisive issues, that Macron has either failed to face or to solve, and propose solutions that sound sensible, backing them up with a record of competence and good management that she is generally credited with at the head of the Ile de France region.

 

So far in the presidential campaign, Macron, who is almost certainly a candidate for a second five-year term but has not yet declared himself as such, has had an easy ride. With his opposition weak or divided or both, he has been able to skilfully manipulate the focus of media attention to his record in office and above all his grand vision for France’s future. In addition to his management of the pandemic, which is generally seen as creditable, he does have a record to defend on other issues too, and will be keen to do so, plucking it from the obscuring fog of the almost year-long gilets jaunes episode, followed almost immediately by the arrival of Covid 19.

 

Since 2017 however, France has moved towards the right politically. The left, from which Macron emerged in the Hollande administration, has receded, largely though its own failings, into irrelevance.  Whether he can be described as someone who has “governed as a liberal conservative” (Ben Hall in the FT on December 29^th) or a “Surreptitious Socialist” (Charlemagne in “The Economist” in July 2021) Macron’s challenge in the forthcoming campaign will be to offer a centre-right defence of his record and a centre-right vision for the future, while not alienating the centre-left electorate who voted for him in 2017. Pécresse on the other hand, will have to defend her own centre-right platform, while not alienating the further-right leaning voters of Marine Le Pen and Eric Zemmour.

 

Assuming for the time being that the two extreme right wing candidates are able to gather enough signatures to stand but then end up cancelling each other out in the first round of voting on April 10^th, letting Pécresse come out narrowly ahead, assuming too that the gaggle  of left-wing candidates poll little more than 5% each, the middle ground, where all presidential elections have been won since 1958, will be fought over in the run off by two politicians with similar backgrounds, experience and vision. That may well turn out to be the main attraction of the 2022 campaign!