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By electing a president who asks nothing of them, the people of France have again absolved themselves of responsibility for a broken social model, this time with global implications (Anthony Jenkins/The Globe and Mail)
By electing a president who asks nothing of them, the people of France have again absolved themselves of responsibility for a broken social model, this time with global implications (Anthony Jenkins/The Globe and Mail)

TIMOTHY SMITH

France takes the easy way out Add to ...

The second page of president-elect François Hollande’s election platform declares that France’s economic problems are the result of “finance” and “the current [Sarkozy]administration”– as if the Socialists bear no responsibility for France’s economic problems. The contrast with Tony Blair’s 1997 election manifesto could not be more stark. Mr. Blair took responsibility for Labour’s past mistakes. Alone among European social-democratic parties, the Socialist Party of France is unreconstructed, unreformed and bereft of new ideas. No mainstream leader in Europe takes the party seriously.

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In one week, its leader will be in charge of one of the world’s largest economies. Mr. Hollande is a 57-year-old with no obvious accomplishments to his name after a 30-year career in government. He sees nothing of value in the reformist careers of Jean Chrétien, Tony Blair, Goran Persson of Sweden or Gerhard Schroeder of Germany. The French have voted against Nicolas Sarkozy rather than for Mr. Hollande.

Elected in 2007 to bring about a “rupture” with France’s broken social model, Mr. Sarkozy soon lost his nerve – or had no nerve to lose. The man who presented the 35-hour work week as the very embodiment of Socialist folly chose to retain it. The man who promised to cut unemployment to 5 per cent and allow the French to “work more to earn more” paid people to work the same amount of time for more money. People who chose to work beyond 35 hours a week could now do so with considerable tax benefits. The labour code became more complex and the national debt rose, as did non-redistributive social spending and unemployment. Pension reforms (retirement at 62) were modest in comparison with those in other countries. In 2008, Mr. Sarkozy rediscovered his inner interventionist, arguing that the global crisis had “relegitimized” the French model. So when Mr. Sarkozy warned against Mr. Hollande’s reckless statism, he had no credibility.

In France, those who had never been keen on reform found an excuse to procrastinate – hadn’t Wall Street caused the mess? In fact, Wall Street’s collapse merely highlighted France’s underlying problems, which stem from the domestic policies of the 1980s – an unusually low retirement age, a restrictive labour code, high payroll taxes and a civil service with 500,000 more employees than in Germany. The French people do not want reform. In 2007, 53 per cent of voters supported the idea of reform – as long as other people paid for it. In 1981, France thought it could engage in Keynesianism when most countries had abandoned it. France alone paid the price for its mistakes. Today, France’s dogmatic resistance to reform has global implications.

Mr. Hollande proposes to cut the deficit by raising corporate taxes, financial-transaction taxes, the wealth tax, inheritance taxes and income taxes on the top 10,000 earners (those making more than €1-million a year). And he thinks that he can do all of the above and have all other things remain equal, as if there will be no spin-off effect on business confidence. His projections of future economic growth are too optimistic. Mr. Hollande asks nothing of the 99 per cent. Responsibility is for other people. He proposes to lower unemployment by creating more public-sector jobs, not by cutting the private sector loose from the noose that has been holding it back.

At the core of France’s problems lies its failure to have a reckoning with the policies it chose during the 1980s. Mr. Hollande’s political mentor was François Mitterrand, the well-intentioned architect of structural unemployment and intergenerational inequality. Mr. Mitterrand’s vision was fulfilled with the 35-hour work week law, which drove up business costs and forced down wages even as the Socialists promised this would not happen.

Mr. Hollande’s fixation on the rich and the financial sector serves to absolve the average French person of responsibility for France’s problems. One searches Mr. Hollande’s speeches and his election manifesto in vain for any mention of competitiveness and structural reform. Since he has not prepared the ground for reform, the French people will resist it when the international bond raters, or Germany, or the IMF, insist on it. With the Socialist Party’s election manifesto, one is tempted to see a once-great nation’s collective suicide note. Alas, the future is probably less alarming: a continuation of 30 years of high unemployment and shattered dreams, once again explained away with reference to a foreign bogeyman, Germany.

Timothy B. Smith is a professor of history at Queen’s University and the author of France in Crisis.

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